Annual Report 2008
Year Ended March 31, 2008

Bound to the Future

ProﬁleBound to the Future
Since its founding in 1954, the Nipro Group has enjoyed continuing
growth thanks to the trust it has achieved worldwide through the
manufacture and sale of medical equipment and high-value-added
pharmaceuticals. Key themes that propel our ongoing growth are
the dedicated pursuit of technology that helps improve the quality of
MedicalPharmaceuticallife of patients and the development of original products in line with ourEquipment
Business
Business
corporate philosophy of contributing to society through technology-oriented
business activities.
The Nipro Group is highly valued in Japan and overseas as an artiﬁcial
Glass &
kidney and dialyzer maker, and is now working to be known equally for its
Materials
artiﬁcial hearts, lungs, pericardia, skin, and blood. The Group is also actively
Business
involved in the generic pharmaceutical industry with the promotion of injection, oral,
and percutaneous absorption drugs.
Centering on the two main areas of medical equipment and pharmaceuticals,
The Nipro Group plans to focus on the research of medical equipment and expand
operations as a comprehensive manufacturer. Bounding toward the future, we aim tobecome a top maker of artiﬁcial organs worldwide and the chief maker ofpharmaceuticals in Japan.

Contents
1
2
3
6

13

18
19
21
22

1

ProﬁleConsolidated Financial Highlights
For the Attention of Shareholders and Investors
Business Activity Report
7 Manufacturing System
9 Sales and Maketing
11 Research and Development
Review of Operations
13 Medical Equipment Business
15 Pharmaceutical Business17 Glass & Materials BusinessNews and Highlights
Corporate Governance/Compliance
Board of Directors and Auditors
Financial Section 2008

Disclaimer regarding Forward-looking Statements
This report contains forward-looking statements
regarding business indices, strategies andperformance representing the expectations andjudgments of the management, based on
information available to the Company andpublishable at the time this report was prepared.
When reading this report, please understand thatforward-looking statements involve
potential risks and uncertainties;
actual future business performance and forecasts
may therefore differ materially from those containedin these statements, given the possible emergenceof new factors or changes in economic
circumstances and/or the business environment.

Consolidated Financial Highlights
Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31, 2008 and 2007

Thousands of
U.S. dollars

Millions of yen

2008

2007

2008

For the year:
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
R&D expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 172,113
13,677
4,454
25,90015,054
6,194¥ 184,363
13,053
8,555
23,093
12,4704,461$ 1,717,866
136,51144,456
258,509150,255
61,823

At year-end:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 349,302
118,156¥ 336,660
125,651$ 3,486,396
1,179,319¥¥$

Per share data (in yen and U.S. dollars):
Net income:Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

70.2
-

37.5
1,861.8

134.7
80.0
1,979.2

0.70
-

0.37
18.58

The U.S. dollar amounts in this report represent translations of Japanese yen, for convenience only, at the rate of ¥100.19=US$1, the approximate exchange rate on March 31, 2008.

Net Sales(Millions of yen)

15,000250,000
200,000

Operating Income

206,801
188,700 192,320
184,363

12,000172,113(Millions of yen)

13,677

12,557

12,332

7.2
8,555

8,000

6.0

10,404

4.7

6,000

6,000

4,000 4,216

50,000

3,000

2,000

0
2004 2005 2006 2007 2008

4,519 4,513

4,454

4.0

4.7

4.3

3.7

2.0

0

0
2004 2005 2006 2007 2008(%)

Return on Equity
8.0

100,000

0(Millions of yen)

10,00013,0539,000

150,000

Net Income

2004 2005 2006 2007 2008

2004 2005 2006 2007 20082

For the Attention of Shareholders and Investors

Moving toward the long-awaited expansion ofsales on the global market.
Overview of Business andResults during the Current Term
Construction of a Framework for Realization of
the “FY2010 Targets” Almost Completed
The global economy during FY2007 (the year ended March 31,2008) gradually deteriorated, as was evident in the steep risein the price of crude oil and the prices of raw materials
especially from the second half of the year and theappreciation of the yen caused by concern about recession in
the United States. In the Japanese world of medical care,competition over sales prices in the industry originating inpolicies aimed at restricting medical costs grew ﬁercer, as didcompetition over sales of general-purpose medical
equipments and products on the global market.
On the basis of this economic environment, the Niprogroup withdrew entirely from store operations during FY2006
and we became a manufacturer specializing in medical
equipments and pharmaceutical products. This was a year
when we concentrated our management resources on two
speciﬁc areas of business and got on track to creating thefoundations on the product and manufacturing fronts forrealizing our mid-term FY2010 management targets.

In our core business area of medical equipments, ourintegrated production system extending from hollow ﬁber
operated smoothly and contributed to an expansion in our
key dialyzer business. We also began mass production of our
new dialyzers. As regards the cardiopulmonary business thatwill be constituting next major pillar of our business activities,
we increased our consolidated sales in this area with the startof sales all over the world under the Nipro brand name.
However, since more than a half of these key products areexported from Japan, we were adversely affected in terms of
proﬁts by ﬂuctuations in the exchange rate.
In the ﬁeld of pharmaceutical business, adding the ﬁeldof percutaneous pharmaceuticals through M&A has made it
possible to create a structure enabling the production andsale by the Nipro group of generic pharmaceutical productsof all kinds and the application of this system to all ﬁelds ofpharmaceutical products through contract manufacture. Dueto these factors, consolidated sales in this businessincreased.
As a result of these efforts, our consolidated net sales
during the term were down by 6.6% over the previous year
(down by ¥12.2 billion) to ¥172.1 billion due to our withdrawal
from store business (sales from store business during the

Net sales and capital investments(Millions of yen)

160,000

16,00015,336140,000

14,000120,000

12,00010,520100,000

9,624

7,772

80,00076,00978,727
6,709

82,50440,00020,00025,33910,00097,300

8,294

8,000

7,814

6,000

5,314
35,22021,97910,170

9,171
7,250

60,0004,976

90,868111,084

42,152

48,7544,000

26,207

2,000
0

0

2003
Net sales:

3

2004

Medical Equipment Business2005
Pharmaceutical Business

2006
Capital investments:

2007
Medical Equipment Business2008
Pharmaceutical BusinessMinoru Sano President

previous year amounted to ¥31.0 billion). Consolidated
operating income amounted to ¥13.7 billion (up by 4.8% on
the previous year).
Our consolidated net income fell by 47.9% over the previous
year to ¥4.5 billion due mainly to losses from exchange rates.
We are sticking rigorously to our policy of not hedging
on foreign currencies. In the short term we can not avoid theinﬂuence of exchange rate, but we are intending to respondto ﬂuctuations in exchange rates by strengthening our sales
capacity and reducing our manufacturing costs, and in thelong term we intend to proceed with a policy of transfer of
production bases overseas.

Business Strategy
Strengthening the Sales Structure on Global Markets
and Aiming to Achieve the Targets Set for FY2010
Our FY2010 targets envisage consolidated sales of ¥200
billion, ordinary income of ¥20 billion and return on equity of
10% in FY2010.
In the general-purpose product category which will
constitute the foundation for realization of these targets, wehave moved in the direction of expansion on the basis of apolicy of intensive production through the “supply ofhigh-quality low-cost products through mass production” inorder to win out in competition on the global market.
With regard to the construction of a system to enable
the production of 60 million dialyzers, which is the key featureof our targets for FY2010, this has now become a feasible
proposition due to the capital investment of just under ¥25

billion effected during FY2007. Increasing sales on the global
market is set to be a major priority in the future, and in thisregard we have established a overseas network of 45 bases
during the current year following the addition of three newbases in the Philippines and elsewhere. We are planning to
set up new bases in Germany, Romania, Uruguay andothers in the course of the next year in an effort to expand
sales rooted in the medical equipment markets of speciﬁc
individual countries.
In the ﬁeld of generic drugs, we have been assisted by
the policies aimed at encouraging the use of these drugs
being implemented by the Japanese Ministry of Health,Labour and Welfare. While working toward expanding the
production system that enables response to these measures,
we are engaged on a strategy that takes account of sales notjust in Japan but in other countries as well. On the other
hand, as regards contract manufacture business, a period ofseveral years is required until production can be commenced
due to the need to obtain the necessary authorizations, andthe Nipro group is currently at the stage of carrying out
forward-looking capital investment in this regard. Our
pharmaceutical business are likely to enter a period of major
growth from FY2010, when we begin production of items forwhich contracts have already been entered into.
We are intending to carry out capital investment inexcess of ¥27 billion next year centering on pharmaceuticals,
and this will be partly prior investment with sights set on
achievement of our targets for FY2010. We will have virtuallycompleted major aspects of capital investment in connection
with both medical equipment and pharmaceutical products inthe course of next year, after which we will at last enter into aperiod of increased sales on the global market.

4For the Attention of Shareholders and Investors

Dividend Policy
Dividends of ¥37.50 Issued
Adopting the “performance-linked remuneration system”, thatis the rule of proﬁt sharing among shareholders, employees
and management, as our basic approach, we have been
aiming at a 50% payout ratio on a unitary basis.
On the basis of the proﬁt-sharing method, our dividends
for the present year have been issued at a rate of ¥37.50 per
share, a ﬁgure calculated by adding a year-end dividend of¥9.50 per share to the mid-term dividend of ¥28 per sharealready issued. Dividends during next year will also be issued
on the basis of the proﬁt-sharing method.

results in connection with both medical equipment andpharmaceutical business.
Our plan for FY2008 is to achieve consolidated sales of¥184 billion (up by 6.9% on the previous year), consolidated
operating income of ¥12.8 billion (down by 6.4% on theprevious year), and consolidate net proﬁt for the term of ¥6.1
billion (up by 37.0% on the previous year). These results arepresumed upon exchange rates of ¥100 to the US dollar and¥155 to the euro.
We hope that our shareholders and investors will lookforward to our future progress and results, and in themeantime we would like to ask you for your continuing
support.
August 2008

Prospects for Next Year
Minoru Sano
Prospect of Increased Sales in Connection with Both
Medical Equipment and Pharmaceutical
Products Business
The Japanese economy is likely to move forward in difﬁcultbusiness conditions under the inﬂuences of the steep rise in
the price of crude oil, higher interest rates and sudden
ﬂuctuations in exchange rates.
The Nipro group will continue to focus on thedevelopment of new products and to make efforts to improve
our results by strengthening our production capacity and sales
capacity in each category. We expect thereby to improve our5

PresidentOur Three Words toDeﬁne our Future
Business Activity Report

7 Manufacturing System
9 Sales and Maketing
11 Research and Development

660Million Dialyzers in FY2012

As a manufacturer specializing in medical care, we are aiming toachieve the top position on the global stage in terms of quality, quanityand pricing.
In the ﬁeld of medical equipment, our aim is to become theworld’s top company as regards to quality and quantity in connection
with the dialyzers that consitute our key product. We produced 31
million dialyzers in FY2007. Our aim now is to expand production
further to 60 million pieces by FY2012 and thus occupy top share of
the global market for dialyzers.
With this target in mind, we established a production system forhollow ﬁbers in FY2006 at the Odate factory where we produce our
dialyzers. We have created an integrated development and production
system that extends from the materials stage and have enhanced ourcontrol capacity in connection with quality, our capacity to maintain afull range of products in line with the needs of our customers, and our
predominance as regards to costs. In FY2007 we invested a total of ¥9billion to establish a system that would make it possible for us to
produce 45 million dialyzers a year.
We are also directing efforts toward investing in equipment at ourfactory in Thailand with a view to ensuring a stable supply of insulin

needles and other medical equipments onto the global market.

S

trengthening Production of Generic
Drugs Centering on Oral Drugs

We are actively investing in the ﬁeld of pharmaceuticals and are putting
efforts into achieving superiority as regards to quality and pricing
through intensive production.
We are placing particular importance on expanding production in
the ﬁeld of generic drugs. Accompanying the strengthening of policies
aimed at cutting back on medical costs, generic drugs have come into
focus in Japan, and developments in the industry are advancing
quickly. The manufacturing, sales and contract manufacture of genericdrugs is one of the pillars of growth for our company’s pharmaceuticalbusiness, and we are working on an active strategy of expansion.
Over the past few years we have been adopting a policy of M&A
that has led to several pharmaceuticals companies that are particularly
strong in the area of oral drugs come under our wing as subsidiaries. In
2004 we invested in Takeshima Pharmaceutical Co., Ltd. (now Nipro
Genepha Corporation), and in July 2005 Tohoku Chugai
Pharmaceutical Co., Ltd. (now Tohoku Nipro Pharmaceutical
Corporation) became a subsidiary. In April 2006 we invested in theestablished generic drugs company Zensei Pharmaceutical Industries

Manufacturing System

Expansion
With the aim of becoming the world’ s top manufacturer
in the medical ﬁeld, we have continued to work towardraising quality and strengthening our production
capacity in the two areas of medical equipment andpharmaceuticals. With our production capacity
extending over the whole range of pharmaceuticalproducts, the Nipro Group is also growing as acorporate entity engaged in contract manufacture.

7

Odate Factory (Nipro Corporation)

Co., Ltd. As a result of these measures, the oral drug production
capacity of the group as a whole has risen to a level in excess of 4
billion tablets per year. We hope in the future to achieve a production
capacity in excess of 10 billion tablets per year.
Tohoku Nipro Pharmaceutical Corporation is currently engaged
on the construction of Japan’s largest new solid drugs facility. At thePhase 1 start-up point in December 2008, production capacity will be
1.4 billion tablets and will eventually arise to 6 billion tablets. Moreover,
the Kishiwada Plant of Zensei Pharmaceuticals Industries Co., Ltd. hada production capacity of between 420 and 430 million tablets in
FY2006, but we are currently creating a system that will increase thiscapacity to 1.5 billion tablets per year.

M

anufacture of Percutaneous Drugs

In parallel with increasing production capacity, we are also directing
efforts toward expansion in the ﬁeld of contract manufacture. We are
already among the top players within Japan in connection with thecontract manufacture of injectables and oral drugs. However, since
implementation of the revised Pharmaceutical Affairs Law in 2005,
Japanese pharmaceutical companies have seen production sectors
disintegrate and the phenomenon of outsourcing. We intend in the

future to work on creating a system allowing for quick reaction andfullﬁllment in the production of all kinds of pharmaceutical products,
including of course injectables, which are our particular strength.
In May 2007 we became capable of producing percutaneously
absorbed drugs as a consequence of Saitama Daiichi PharmaceuticalCo., Ltd. (the name of the company was changed in July 2008 to Nipro
Patch Co., Ltd.) becoming one of our subsidiaries. This means that wehave now completed a system enabling us to manufacture
pharmaceutical products in all ﬁelds and have created the foundations
for expanding our business in the two ﬁelds of contract manufacture
and the production and sale of generic drugs.
With the goal of developing new drugs and stepping up the
production of generics and contract manufactured products, we are
currently building the new Hanyu tape factory, serving as our base forthe production of hot melt tape medicaments. The factory is scheduled
for completion in December 2008 and will be able to produce 150
million tape products per year. Plans include exporting such tape-based
medicaments.

Artist rendition of Hanyu Factory (Nipro Patch Co., Ltd.)8

O

ngoing Expansion of the Overseas
Sales Network for Medical Equipment

The Nipro Group’s overseas business operations center on the twocategories of OEM (Original Equipment Manufacturing), including our
key medical equipment, and our own brand products. However, overthe past few years we have been attempting to strengthen sales of ourown brand products by directing efforts especially toward the openingof new branches and overseas subsidiaries. The changeover from
distributors to direct sales has been moving forward at a rapid pace.
In continuation from FY2007 we have set up a sales ofﬁce inManila, Philippines to be able to provide ﬁnely tailored services closely
linked to users. In addition, one of our overseas subsidiaries has takena French medical equipment sales company under its wing as a
subsidiary. We have also set up a distribution center in Memphis,
Tennessee in United States of America to serve as a base for
distribution in the Americas while creating a structure for the stablesupply of products.
In the course of FY2008 we are planning to open new bases inthree continents. These are Germany and Romania in Europe, andUruguay in Latin America, and Dalian, Qingdao, Amoy and Chengdu in
China. These cities in China are in addition to those already operating inShanghai, Guangzhou and Beijing.

In addition to expansion, the Nipro Group created alliances inJanuary 2008 with OEM customers in connection with dialysis-related
products. Making use of our strengths as a manufacturer and relying on
our high quality and supply capacity, we will be selling not only OEM
customer brands but also joint brand products created by ourselves
and OEM customers through their own respective sales channels.

A

iming Toward the Diffusion of Generic Drugs

In June 2007 the Ministry of Health, Labour and Welfare set a numericaltarget of 30 percent for share of the market to be occupied by genericdrugs by FY2012. Generic drugs are not as common in Japan as they
are in Europe and the United States; however, the government is now
doing everything possible to encourage their diffusion in order to reducethe burden of medical costs placed upon patients and to improve thestate of public ﬁnances in connection with medical insurance.
Due to the new target set for generic drugs, new changes weremade in prescriptions in April 2008. Up until then, a doctor’s signature
on a prescription was required when generic drugs were to beprescribed. The system only requires a doctor’s signature when achange cannot be made to generic drugs. This will in turn increase
cases where dispensing pharmacies will prescribe generic drugs at theSales and Marketing

PioneerIn the ﬁeld of medical equipment, we intend to continue working
on the creation of a global sales network and directing our efforts
toward expanding sales of Nipro brand products. As regards topharmaceuticals, we are involved in sales promotion activities andin improving the provision of information, spurred on by thegovernment’ s policy of popularizing generic drugs.

Nipro Group Overseas Network[ Overseas ]Memphis (U.S.A)

Sales Locations

Factories

Asia
13 locations

Europe11 locations

Asia
2 locations

America
14 locations

Africa1 location

America
2 locations

Mexico City (Mexico)

Miami (U.S.A.)
Tegucigalpa (Honduras)
Puerto Rico

Guatemala City (Guatemala)San Salvador (El Salvador)

Managua (Nicaragua)

San Jose (Costa Rica)
San Carlos (Ecuador)

Panama City (Panama)
Bogota (Colombia)

Lima (Peru)

Headquarters
Principal Sales Locations
Principal Factories
R&D
Distribution Center

9

Buenos Aires (Argentina)
Santiago (Chile)

Sao Paulo (Brazil)

request of patients.
Under the guidance of the Ministry of Health, Labour and Welfare,there has been an increase in the number of large hospitals such asuniversity hospitals (DPC hospitals) introducing a comprehensiveﬁxed-sum payment system for medical costs on the basis of DPC(Diagnosis Procedure Combination). Under this system reimbursementof medical costs is determined for each illness. This means that nomatter what quantity of drugs is prescribed and how many
examinations are performed, the same ﬁxed sum is paid to the hospital.
It is thus likely that generic drugs will become even more frequently
used than before in order to reduce drug costs. Nipro Group estimatesthat DPC hospitals will account for between 60 to 70 percent whenconverted into the number of beds by 2012.
The Nipro Group reckons that this revision in the system of
medical reimbursement will provide us with major business
opportunities, and we are striving to increase our sales to dispensing
pharmacy chains and new DPC hospitals.

R

esponse to On-site Medical Needs such as
the Prompt Supply of Safety Information

Gaining the understanding and trust of medical practitioners inconnection with generic drugs is essential if these drugs are to comeinto wider use. In order to achieve the numerical target of 30 percent
market share to be occupied by generic drugs, the Ministry of Health,Labour and Welfare issued an ‘Action Program for Encouraging the
Secure Use of Generic Drugs’ in October 2007 that outlined thematters that manufacturers of generic drugs need to tackle. These
include stable inventory supply, quality, and availability of information to
medical practitioners. The Nipro Group is working on strengthening
stable supply by investing in production facilities and by means ofquality control through the implementation of tests above and beyond
the requirements for authorization. We are also attempting to makemore information on generic drugs available to medical practitioners.
Medical institutions are cooperating by supplying us with information on
the side effects of these drugs, and we are featuring this information on
our website in order to make it more readily available. We have also
created a system that makes it possible for us to provide information
promptly and appropriately when requested to do so by medical
institutions and pharmacies covered by health insurance.
The distribution channels for drugs produced by the Nipro Groupcan be divided into areas. The ‘wide-area wholesale routes’ aimed at
key hospitals such as university hospitals that not only focus on original
drugs but also handle generic drugs, and the ‘sales company routes’
targeted at small and medium-scale hospitals that primarily handle
generic drugs. In terms of sales activities, Nipro Pharma Corporation is
active on wide-area wholesale routes while Nipro Genepha Corporation
is involved mainly on ‘sales company routes’. In order to increase oursales yet further, the Nipro Group intends to engage in sales promotion
activities in response to customers’ needs by encouraging Nipro
Genepha Corporation to sell the double bag and pre-ﬁlled syringe
drugs of Nipro Pharma Corporation along sales company routes.

New Delhi (India)
Beijing (China)

Mumbai (India)
Osaka ( Japan)
Calcutta (India)

Shanghai (China)
Muntinlupa City (Philippines)

Chennai(India)Ayuthaya (Thailand)

Brussels (Belgium)
Moscow (Russia)

Manchester(U.K.)

Bangkok (Thailand)
Singapore

Clermont-Ferrand(France)

Warsaw (Poland)
Breda (The Netherlands)

Madrid (Spain)

Milan (Italy)
Istanbul (Turkey)

Riyadh (Saudi Arabia)
Dubai (U.A.E.)

Johannesburg(South Africa)

10F

ortifying Our Artiﬁcial Lung Operations

Becoming the world’s leading manufacturers of artiﬁcial organs, inaddition to artiﬁcial kidneys, we sell extracorporeal left ventricular assist
devices and insulin pumps, and develop artiﬁcial blood vessels andpericardium.
One of our expanding artiﬁcial organs business projects is theartiﬁcial lungs or oxygenators, and we put special energy to this area.
Our membrane oxygenator is widely used in open-heart surgery inJapan. Our own cardio-pulmonary system is under the development byusing this oxygenator as a core product. Also, we are developing
cardio-pulmonary bypass circuits including a reservoir, centrifugal
pumps and cannulaes for taking blood in and out of circulation as an
extracorporeal cardio pulmonary bypass (CPB) circuits required in heart
surgery. During FY2008, we will market a new PCPS*1 system inJapan. This is a universal type of respiratory circulation support
treatment with our oxygenator for more than one month use.
In December 2006, we took over the oxygenator business of theBrazilian subsidiary of Edwards Life Sciences Inc. (‘Edwards CPP’). The
oxygenators and related products by Edwards CPP are currently being
supplied to approximately forty countries. With this Brazilian anddomestic membrane-oxygenator sales, we obtain 10% of worldwide

market share. By utilizing the hollow ﬁber spun by ourselves at the
Odate factory in the near future, we will be able to develop new
oxygenators at a low cost and with high performance. We put ourcontinuous efforts to work on developing and supplying sophisticated,
high-functioned, and low-cost products, so that Nipro can gain a 30
percent share of the global oxygenator market.
1 PCPS is an abbreviation of ‘Percutaneous Cardio Pulmonary Support’, that
*supports
patiens’ damaged heart and lungs by circulating blood via femoral artery

less invasively.

Development of High Value Added Preparations

In the ﬁeld of development of injectable pharmaceutical products, weare developing kit preparations that contribute to improved quality of
medical treatment in several aspects such as safty, sanitary conditions
and operational efﬁcency, and we are also expanding our range of
products. In FY2007 we released three new medicine products
containing two ingredients of the pre-ﬁlled syringe kit type that do not
require transfer from vials or ampoules. We are also developing double
chamber pre-ﬁlled syringes*2 and intend to applying for authorization of
production and sale of two products at the end of FY2008. As regards
liquid-powder double bag kits of the type that are intended to be

Research and Development

Keenness

Making use of the strengths that can be attributed to ourpossession of two sides to our business, namely Medical
Equipment and Pharmaceutical, we intend to move ahead with thedevelopment of products with higher added value through fusionof technology to provide a response to the ﬁelds of regenerative
medicine and detailed treatment, the importance of which is likely
to grow in the future.

11

dissolved at immediately before use, we have begun to sell three newantibiotic products and are currently developing another product for
which we intend to apply for authorization of production and sale in
April 2008. We submitted applications in January 2008 for four
products with two ingredients of the pre-mixed bag type that are
intended to reduce the possibility of medical errors occurring by diluting
the medical ﬂuid beforehand to a prescribed density. We intend toengage in contract manufacture in connection with two other products.
In the ﬁeld of of oral drugs, we are applying for authorization of
production and sale of two products,and are developing one productfor orally disintegrating tablets that can be taken without water.
Also, we are selling six products with six ingredients in the ﬁeld of
medicines based on standards applying to items with low medicinalcontent intended for patients such as elderly people whose kidney
functions and drug metabolism functions have deteriorated andpatients suffering from functional disorders. One of these products was
newly released in FY2007. As regards medicines based on standards
applying to items with low medicinal content, an application for new
manufacture and sale of one product was submitted in FY2007, andwe are currently engaged on the development of two products with two
ingredients. In addition, we are continuing with new technical researchin connection with the absorption of drugs that cannot be absorbed bymeans of oral administration as DDS preparations. A prototype
manufacturing device was created in FY2007, and medicines are being
devised and assessed.
In the ﬁeld of oral medicine in the generic drug market, thenumber of items for which application for production and sale wassubmitted in FY2007 rose to seven items with ﬁve ingredients. Three
items with two ingredients in the area of oral drug whose mostdistinctive quality lies in the ease with which they can be taken were
subject to an application for approval of production and sale in FY2007.
2 Double chamber pre-ﬁlled syringes: a drug unstable in solution of is kept in*powder
form seperately from the solution, yet in the same syringe, to be dissolved

only when needed for use.

R

esponse to the Fields of Regenerative andCellular Medicine

In the ﬁeld of regenerative medicine, we are engaged on research anddevelopment with sights set on the next generation. We are currently
developing nerve-regeneration tubes that regenerate nerves that havebeen severed under circumstances such as accidents and surgicaloperations and enable them to recover their functions, and heart
membrane regeneration support membranes that regenerate heart
membranes severed in the course of an operation on the heart withoutcausing the heart membrane to adhere. In FY2007 we issued products
including own cell culture kits and own periosteal cell culture kitsmaking use of cell culture technology, and we were engaged on thedevelopment of hematopoietic stem cell culture bags for the treatmentof leukemia and culture systems for anti-ageing treatment.
At the end of 2007, Professor Shinya Yamanaka of the Universityof Kyoto became the ﬁrst researcher anywhere in the world to create
iPS cells (artiﬁcial multi-function stem cells). This research has thepotential to totally transform the very concept of medical treatment andto lead to revolutionary new forms of treatment. With regard to this new
type of medical care, we will be taking part in research anddevelopment based on the cell culture technology that Nipro has built
up over the years, and we intend to work toward the realization ofcellular medical care.
In the pharmaceuticals sector, recombinant human serum
albumin has being worked on with a view to commercial release by our
afﬁliate Bipha Co., Ltd. Authorization for manufacture and sale wasobtained in October 2007 and the product was released in May 2008.
We reckon that sales will peak in FY2010, and Nipro intends to work on
further applications of this product in the future. We plan to expedite
studies of how uses can be developed on the basis of joint research
conducted by our company and university research bodies.
In the ﬁeld of blood-related products too, we drew up a new
three-year plan to run from FY2008 for artiﬁcial oxygen carriers of thehemoglobin capsule type on which work has been proceeding on thebasis of cooperation between the industrial and academic sectors, andwe intend to update our system and our facilities with a view toachieving practical application. We are also currently selecting ideal
compounds in connection with artiﬁcial oxygen carriers using synthetic
hemoglobin not originating in human blood. We established asmall-scale production method for artiﬁcial oxygen carriers using
genetically modiﬁed hemoglobin in FY2007.

Oxygenator
Nipro has a wide range of cardiopulmonary products to support
every requirement of our customers. Following to the acquisitionof cardiopulmonary business, we have decades of experience inthe ﬁeld by offering sophisticated products and well organized
distribution channels. Our oxygenator andrelated products have been favorably
operated by perfusionists anddoctors all over the world. Nipro is
the world leader of development andproduction of cardiopulmonary
products. Our products aredesigned for safety and ease of use
with the highest level of quality.

12Review of Operations
Market Overview

pharmaceuticals prices made in FY2008.

We faced a very difﬁcult market environment within Japan in
FY2007 due to the increasing severity of sales competition fromset, dialysis equipment and other products related to artiﬁcial

Domestic sales focused on dialyzers, dialysis blood tubing

other companies and pressure over lowering prices. This wascaused by the ongoing functional classiﬁcation of dialyzers, strong
efforts to cut down on medical costs by medical institutions, andkidneys. We worked on the development of new products,

the joint purchase of consumables on the market.
On the other hand, as regards to overseas sales,

products related to intravascular treatment, we improved ourconsiderable foreign exchanges losses were experienced due tothe sudden rise in the value of the yen in respect to the dollar. Pricecompetition over dialysis-related products became increasingly

thrombotic supplementation equipment, stents and the introduction

severe, though the market continued to expand.

market share. In the ﬁeld of products related to examination, we

Responses and Results
In terms of domestic business, we attempted to make further
improvements in our sales efﬁciency and to strengthen our sales
force. We also developed and introduced to the market new
products for artiﬁcial kidneys, treatment of the circulatory organs,injection and transfusion, and examination purposes. When offering
them to customers, we have encouraged the sale not just of
individual products but of entire product related packages toincrease our share of the market and to augment sales.
As regards to international business, following on from FY2006

improving quality, and strengthening sales distribution in order toincrease our market share and increase sales. In the ﬁeld of
product lineup through the development of PTCA balloon catheter,of new equipment. We strengthened our sales of products forinjections and transfusions such as syringe in order to increase ourstrengthened our sales of blood collection tube used in blood tests.
As regards to overseas sales, we continued to work on
making improvements in our sales ofﬁces. Our push was on our key
product, the dialyzer, where we strove to increase our sales
focusing on newly developed products but including related
products as well. We will be continuing to work hard on promoting
sales of dialysis equipment to BRICs nations during FY2008, andwe intend to introduce new items and enhance the functions of ourexisting products.
We also intend to step up the functions of our products in the
diabetes ﬁeld. As regards to dialysis-related products on foreign

Medical Equipment
we have continued to improve our sales ofﬁces and the quality ofour product experts, which resulted in the expansion of sales. The
dialyzer, which is the main item in our dialysis-related productrange, did very well in terms both of Nipro brand sales and OEM.
To increase in sales of dialyzers, we introduced new dialysis
equipment and added a new feature to our existing dialysis
equipment. In addition, as a result of energetic sales promotion
activities in the BRICs nations, we made successful bids for sales in
the Middle East and witnessed strong growth in sales in Latin
America and China.
The artiﬁcial lung business that we purchased in FY2006
provided us with the opportunity to begin sales of the Nipro brandin many parts of the world. The sales of dialysis-related products
also showed steady increase.
As a consequence, sales in the medical equipment business
in FY2007 amounted to ¥111.1 billion, up by 14.2% on the previous
year. Operating income was up by 10.4% on the previous year to¥15.8 billion.

OutlookThe market environment surrounding the Japanese economy in
FY2008 is likely to be even more severe and unpredictable than
before. The environment affecting domestic sales is extremely
volatile, with redemption prices being lowered due to the revision in13

markets, we are tackling the development of products that are able
to meet the needs of increasingly globalized markets.
Through the implementation of this strategy, we hope toachieve sales of ¥117.0 billion for medical equipment in FY2008, up
by 5.3% on the previous year.

Dialyzer
For many years, Nipro has beenrecognized as a leading company
in the world of dialyzer
manufactures. Nipro has been
manufacturing the
FB/SUREFLUXTM series of CTA
dialyzers over the past 25 years
and, in recent years, has also
launched the SURELYZERTM
PES series of PES dialyzers. As aresult, Nipro is steadily gaining global market share in the realm ofsynthetic dialyzers.
In 2008, Nipro launched the ELISIOTM-H series of new highﬂux PES dialyzer POLYNEPHORNTM membranes.

AVF (Arterial Venous Fistula needle)
Nipro has been recognized as oneof the world largest dialysis
product manufacturers with theconcept of continuous productdevelopment. As a part of thisproduct development, Nipro
develop the arterial venous ﬁstulaneedle with newly evolved safetyfunction “SAFETOUCHLOCKTAILTM” safety ﬁstula needle.
In the winter of 2008, Nipro has launch “SAFETOUCH LOCKTAILTM”
ﬁstula needle which has a unique concept of “easy to use for clinic
technicians” and “comfortable for patients” in the United States ofAmerica and will market in all over the world for the improvement of
the quality of medical both for patients and clinic technicians.

SafeTouchTM Huber Infusion Set
Nipro actively pursues thedevelopment of innovative andsafe products with the safety ofhealthcare professionals andpatients in mind.
One of these products is the
SafeTouchTM Huber Infusion Set, aproduct that is used for drawing
blood or administering medication
through a Huber needle andsurgically embedded intravascular port. This product also incorporates
an integrated safety mechanism to prevent accidental needle
sticks. One important feature of this mechanism is that it is easy to
conﬁrm its activation by sight, touch, and an audible click.
This product offers a safe working environment for
healthcare professionals without compromising patient safety.

Business
SURDIALTM 55Plus
SURDIALTM 55Plus is a new kind of
dialysis machine that was designed with
the needs of overseas markets in mind
to provide all customers with quality
dialysis treatment.
Standard features of this productare ﬁltration and acetate/bicarbonate
solution proﬁles, and a user-friendly,color TFT touch display that swivels. In
addition, heat disinfection andbicarbonate powder cartridges can also
be used to meet customer needs. All of these functions
contribute to accurate and safe treatment.
SURDIALTM 55Plus was launched in May 2008 and we
expect it to expand business in the dialysis ﬁeld.

14

Review of Operations
Market Overview
In the midst of the ongoing process of globalization, in August 2007
the Ministry of Health, Labour and Welfare presented a new vision
for the pharmaceuticals industry and formulated a ﬁve-year plan forthe creation of innovatory drugs and medical devices. This has
served to increase the ferocity of competition in connection with thedevelopment of new drugs. In order to cut down on the costs ofmedical treatment and to solve the problem of ‘drug lag’ *1 theadministrative authorities have come up with measures such as
expanding DPC hospitals*2 and encouraging the use of genericdrugs through changes in prescription methods. Under these
conditions, the pharmaceuticals market in FY2007 remained in a
difﬁcult environment throughout the year, what with extremely
stringent measures being taken to reduce drug expenditure throughadministrative medical reforms announced in response to the steep
rise in medical costs incurred by the elderly and the increasing
severity of competition with the products of rival companies inconnection with sales.

lag: This refers to a condition in which drugs that are in standard*use1 Drugin other countries cannot be used in Japan. This is caused by the length

Responses and Results

2 DPC hospitals: Hospitals that have introduced a system under which the*costsof medical care including the administration of drugs and injections andIn the midst of a severe market environment we have striven toincrease sales of powdered dialysate solutions for artiﬁcial kidneys,
substitution ﬂuids for HF and HDF kit solutions, and pre-ﬁlled

of time required for authorization for drugs to be granted in Japan whereby
other countries take the lead in carrying out clinical trials and release of aparticular drug occurs later in Japan than in other countries.

hospitalization costs are determined by the government as a ﬁxed daily sum incontrast to the piecework payment method previously applied whereby
charges are calculated on the basis of individual acts of medical care.

Pharmaceuticalsyringe formulations. We have also put efforts into increasing sales ofdouble-bag kit (liquid and powder) formulations and plastic ampoule
formulations. We have seen particularly signiﬁcant increases in thesales of injection kit formulations, in terms of both our own
company’s products and products manufactured to contract.
In order to strengthen our contract manufacture, in FY2007
we acquired all the shares of Saitama Daiichi Pharmaceutical
Co.,Ltd. (SDP), which thereby became one of our subsidiaries. SDP
has extensive technical capacity centering on pharmaceuticals forexternal use and possesses its own R&D division. SDP hopes toengage in R&D-type contract manufacture in the ﬁeld of
percutaneously absorbed administration systems, and we believethat its status as a subsidiary will make a signiﬁcant contribution to
enabling the Nipro Group to expand our business in the ﬁeld ofpharmaceutical products. SDP changed its name to Nipro Patch
Co.,Ltd. in July 2008.
As a result, sales in the pharmaceutical business were up by
15.7% on the previous year to ¥48.8 billion. Due to the increased
burden of ﬁxed costs in the factory engaged in the production of
injection kit formulations, operating income was down by 0.8% overthe previous year to ¥3.3 billion.

actively working on development within the company and on joint
development. We also intend to strengthen our business involving
production to order.
The quantitative expansion in production to order is evident
especially in connection with injectables, oral drugs and externaluse, and we have created a system for undertaking large orders.
In connection with intensive production, the Nipro Group is jointly
developing generic drugs with several other companies including
new drug manufacturers. We are creating a business model that will
make it possible for the Nipro group to manufacture all the genericdrugs that we develop, and products developed by threecompanies on the basis of this business model are scheduled forrelease in July 2008. We are also putting efforts into collaboration
with manufacturers of active pharmaceutical ingredients with a viewto establishing an integrated system of production extending fromThe Biggest pillar in the Nipro Group’s pharmaceutical business isdrug substances to ﬁnal formulations. As regards globalization, we
are working together with global companies based in South Korea,
China and Europe and are making preparations for releasing

contract manufacture.

products in other countries.

Outlook15

We are expanding manufacturing capacities quantitatively
especially in connection with production to order, and we intend toproceed globally. As a result the number of different items being
produced to order at group companies is increasing, as is also theabsolute quantity of the products.
In the ﬁeld of external use newly entering the market, we areGeneric drug business is the second pillar in ourpharmaceutical business.
Because of the changes to be made in the prescription
system, during FY2008 it will be an urgent priority for us to put
together a full range of products of generic drugs. The number of
items in the lineup of a particular generic drug manufacturer is likely
to be one of the criteria applied by hospitals, pharmacies andwholesalers when selecting a generic drug manufacturer, andBusinesspossessing a full range of products is thus essential from acommercial standpoint. The Nipro Group intends to take the lead in
the research and development of generic drugs. As regards items
regarded as indispensable such as the essential drugs*3
announced by the World Health Organization (WHO), we aremaking further advances on the basis of regulation between
companies within the group and introduction (concurrent selling)from other companies. We hope to be able to add around 100
types of oral formulation over the coming year or so, and we also
intend to complete our efforts to put together the whole range ofnecessary products in the ﬁeld of essential drugs.
This strategy means that we are looking to achieve sales in
the pharmaceuticals sector in FY2008 of ¥55 billion, up by 12.8%
on the previous year.

Kit Preparations
Kit preparations are the pharmaceutical products that enable provisionof safe and reliable medical care in a simple form. They contribute toprevention of contamination of preparation process, avoidance of
medical errors and saving of the labor of medical staffs.
One of the reasons why the Nipro Group has been highly
evaluated in the ﬁeld of kit preparations is that it has not only its own
research institutes of medical
devices and pharmaceuticals but
also its own production plant. The
Nipro Group has the integrated
system from development ofcontainers and pharmaceuticals totheir production.
This self-development andproduction system enables the
Nipro Group to provide high-quality
Double-bag kit (Liquid/Powder)products rapidly at low costs.

3 ‘Essential medicines’ or ‘essential drugs’ are deﬁned as follows by WHO:*‘Essential
medicines are those that satisfy the priority health care needs ofthe population… [They] are intended to be available within the context offunctioning health systems at all times in adequate amounts, in theappropriate dosage forms, with assured quality, and at a price the individual
and the community can afford.’ There are approximately 320 medicinesdesignated in this manner.

Half-type kit

Pre-ﬁlled syringe

16

Review of Operations
Market Overview
In the ﬁeld of glass for medical purposes, we are witnessing an
increase in new uses for glass tubes for vials and bottles inconnection with items such as cosmetics containers and babies’
feeding bottles. Market conditions for glass tubes for ampoules are
particularly severe due to changes in containers in favor of materials
such as plastic, past problems involving the generation of glass
powder when nurses have cut ampoules, and the involvement ofother manufacturers in the production of pre-ﬁlled syringes
combined with the drug due to the occurrence of medical errors.
Market conditions for glass tubes for lighting purposes arealso severe due to the need to respond to the large-scale reduction
in costs being made by manufacturers of liquid crystal sets.

in the past. As to glass tubes for lighting, there was a large-scale
fall-off in back-lighting parts and materials due to the need torespond to the attempts being made by liquid crystal panel
manufacturers to decrease their costs.
In ﬁelds other than glass, health foods including products
such as the processed ashitaba herb (Angelica keiskei) put up astrong showing, but the market as a whole failed to grow due to thegeneral dullness of consumer activity.
As a result, sales in the glass and materials business in
FY2007 were down by 11.5% over the previous year to ¥11.4
billion. But operating income were up by 1.3% to ¥1.9 billion due tothe decrease in business costs.

OutlookResponses and Results
In connection with glass for pharmaceutical purposes, strong
results were obtained for glass tubes in connection withpharmaceutical bottles, cosmetics containers and other cartridges,
and pre-ﬁlled syringes. Results were enhanced by the fact that
Nipro is able to produce many different types in small individual
quantities. Results for glass tubes for ampoules were adversely
affected by the change to the use of plastics for the production ofcontainers, and shipments were down to around only 20% of theﬁgures recorded in the heyday of this item.
On the other hand, as far as glass materials are concerned,
exports of glass for thermos ﬂasks especially to the Middle East
were strong and compensated for the fall in demand within Japan,
although they still amounted to around only 20% of the peak ﬁgures

In order to continue responding to the demands of thepharmaceuticals industry, during FY2008 we will be proceedingwith technical innovation in connection with glass manufacturing
technology and will be developing products centering on containers
for drugs. We also intend to proceed actively with the developmentof new products.
In the ﬁeld of glass for lighting, we will continue working on
increasing our sales of LCD backlights and related products in
response to the growing market for liquid crystal panels.
However, despite these efforts, we reckon that FY2008 isgoing to continue presenting us with a difﬁcult market environment
for parts and materials related to LCD backlights, and we forecast
that our sales in the glass and materials business will be down by
1.2% over the previous year to ¥11.3 billion.

Glass & Materials
Business

17

News and Highlights
Release of Nipro CarefastTM, a measuring
device that is able to measure blood glucose
levels rapidly and accurately with only a tinyquantity of blood
In December 2007 Nipro released Nipro CarefastTM, a device
which is able to measure blood glucose levels in a very brief time
(5 seconds) with a small quantity of blood (0.5 microliters). It
sometimes happens that blood glucose levels higher than thereal values are indicated in the case of people receiving infusions

conduct accurate measurements of three-dimensional movement.
It has become generally known in recent years thatlifestyle-related diseases such as diabetes can be prevented orrelieved by improving eating habits and by taking regularexercise every day. By accurately measuring the amount of
movement, WelsupportTM motivates patients to get into the habitof taking daily exercise and contributes to improvements in their
quality of life.

of intravenous ﬂuids containing the sugar known as maltose andpeople who are being administered pralidoxime iodide (PAM),
the antidote to organic phosphorus poisoning. But Nipro
CarefastTM is not inﬂuenced at all by maltose or PAM.
The sensor can be ejected safely from the main unit
without coming into contact with blood, and efforts have thus
been made to ensure the safety of medical practitioners. It isalso possible to conﬁrm easily whether or not blood has beenadequately absorbed by the sensor. With a view to satisfying awide variety of needs, the backlight function makes it possible touse the unit in dark places and to differentiate between the
results of measurements taken before and after meals.

Nipro CarefastTM

Release of WelsupportTM, a device that
permits the accurate measurement andcontrol of the amount of energy consumed
through movement
In May 2008 Nipro released WelsupportTM, an intelligent calorie
counter (a device for recording daily activity) that measures andcontrols energy consumption through physical movement by
patients suffering from lifestyle-related diseases in hospitals andmedical facilities.
It has not hitherto been possible to accurately measure theamount of energy consumed through vertical movement such as
walking up and down stairs using ordinary commerciallyavailable pedometers. In order to solve this problem, we haveincorporated an acceleration sensor and an atmosphericpressure sensor into WelsupportTM, thereby making it possible to

WelsupportTM

Non-preservative containers awarded
the “Good Design” prize
The non-preservative multi-dose containers developed jointly by
Nipro and Wakamoto Pharmaceutical Co., Ltd. were awarded
the 2007 “Good Design” Prize held by the Japan Industrial
Design Promotion Organization.
Attention has been directed recently to the inﬂuence on thecornea and on tear ﬂuid in forms such as corneal problems andallergies caused by the preservative agents present in eye drops.
Non-preservative containers have a structure that makes it
possible to maintain aseptic properties without the addition ofpreservatives. The containers are the same size as thosegenerally employed by eye drop products, and the liquid is justas easy to apply to the eyes. Care has also been taken with thevisibility of the nozzle and the transparency of the bottle.
The approach involves maintaining a sterilized condition
without the use of preservatives through the use of two types ofﬁlter. The design that has made this possible is both effective
and visually attractive. This point was
highly evaluated by the judges,
who were also impressed by theway in which the problems faced
by users had been resolved
through the use of newtechnology and new materials.
In the future we intend to
tackle development andproduction with the emphasis on
the unmet needs of customers
and to make improvements inthe quality and safety of medical
care.

Non-preservative containers

18

Corporate Governance/Compliance

The Nipro Group’ s priority tasks are to establish fair and highly transparent corporate governanceand enforce thorough compliance. To these ends, appropriate organizational frameworks and control
systems have been created and are being constantly improved.

Management control system
In compliance with Japan’s Corporate Law, the Nipro Group has
the following bodies in place, in addition to the Meeting of
Shareholders and Directors. The Board of Directors, Auditors, theBoard of Auditors and Accounting Auditor.
The management control systems that relates tomanagement decision-making, execution and supervision basicallyoperates through the Board of Directors and the Auditors. Thisentails a management control systems that oversees autonomous
corporate business divisions. The systems endeavor to ensure
clear assignment of responsibilities and to reinforce systems ofcontrol.
The Nipro Group’s Board of Directors meets at least once amonth, in principle, to make important decisions, report on
operational execution and hold discussions. At present, two of thethree Auditors are external auditors, as stipulated by the Corporate
Law. No external director is in ofﬁce at present. There is no staff
exclusively assigned to external auditors.

Internal control systems and auditing
The Group Management Meeting, held regularly once a month,discusses important operational execution and makes decisions.
The Nipro Group’s directors and statutory auditors, as well as
representatives of major Group companies, attend this Meeting todiscuss the progress of business activities and any issues pending,so as to make dynamic management decisions.
In accordance with the auditing policy and the division oflabor as agreed upon by the Board of Auditors, each statutory
auditor attends important meetings, including Board of Directors
meetings, and receives reports from Directors and employees, inaddition to inspecting important documents and undertaking
other auditing duties. The statutory auditors hold Board ofAuditors Meeting regularly, or as necessary, in order to exchange

views and hold discussions.
An Auditing Section has been set up, independent from theoperational organization. Aside from the two full-time employees
at the Auditing Section, employees are dispatched as necessary
from the Head Ofﬁce Management Division or other divisions tocarry out inspections timely, smoothly and efﬁciently. The Auditing
Section implements auditing policy and conducts impartial
internal audits based on the annual plan. Mutual coordination
takes place between the statutory auditors’ audit and theaccountant’s audit, ensuring the management director’scompliance with the law, preventing of illegal practices and errors
and improving of the internal control systems.

Status of the compliance/
management risk control system
The Nipro Group set up a Management Risk Control Committee
in an effort to control management risks and further strengthen
systems that promote legal compliance and observation of
corporate ethics.
We also distribute handbooks to executives andemployees to foster an understanding of laws and regulations
and encourage compliance with corporate ethics, implement
internal reporting systems and introduce educational andawareness activities through an internal newsletter.
With respect to the timely disclosure of corporate
information, the Nipro Group aims to disclose important company
information to its investors speedily, accurately and fairly. An
Information Manager has been appointed in the Human
Resources and General Affairs Division, as part of the Nipro
Group’s drive to improve the corporate information control
system.
Should persons not belonging to the company observe the
Nipro Group employee commit an illegal act, or should they be
adversely affected by the Nipro Group employee, a similar
alarm-raising facility for external use is in place so that theManagement Risk Control Committee can be alerted directly.

Conceptual Diagram of Corporate GovernanceAccounting
Auditor(Auditors)
Board ofAuditors(Directors)
Board ofDirectors

Decision-making
Accounting
Audit

19

Operational
Audit

Supervisionof Directors’
executionof duties

Committees

President

Directorwithresponsibility
for operation

Division General Manager,
Manager, Assistant Manager

Management Risk Control Committee

Election

Third Party (i.e. lawyer, accountant)

Meeting of Shareholders

Basic Policy on Internal Control(1) A system to ensure that the execution of duties byDirectors and employees is in compliance withlegislation and the Article of Incorporation
This system is designed to clarify the responsibilities of directors
and employees, ensure the appropriate exercise of authority,
prevent illegal and inappropriate behavior and, should such
behavior occur, implement measures to prevent a recurrence.
For these reasons, the Company establishes internal regulations,distributes materials and conducts awareness activities among
executives and employees (hereinafter, “employees and otherpersonnel”) about the need for compliance with laws and otherregulations, as well as with corporate ethics. We have introduced
a portal site-based hotline as part of our efforts to create aneffective in-house system to call attention quickly to any
misconduct.
(2) A system to deal with the storage and control of
information concerning the execution of duties by
the Directors
This system clariﬁes directors’ and employees’ handling of
documents (including electronic documents) pertaining to the
execution of their duties. The system establishes internal
regulations concerning the creation, storage and disposal of
documents, including those containing information on the Boardof Directors’ decisions. The system also speciﬁes documentation
procedures for the submission and return of applications andﬁnal decision-making. The Company’s documentation systemallows directors and statutory auditors to browse the documents
to which they have legal access. Any alterations or improvements
to the Company’s internal regulations about the handling ofimportant documents require the approval of the Board of
Directors.

the Group. Other meetings are held regularly or as necessary toraise operating efﬁciency. We have introduced an Intranet towhich nearly all employees and other personnel have access.
Such additions to our information infrastructure play a crucialrole in improving business efﬁciency.

(5) A system to ensure the existence of a suitable control
system within the corporate group
We have established a control environment that encompasses
groupwide human and ﬁnancial resources and information
control. This master control system provides instructions for
directors and employees of each Group company, including
those overseas, on creating their own control environments thatretain the spirit of the Group’s basic policy, as well as
information on control awareness and other topics. We also
promote communications among Group companies andactively approach the internal control issues that arise frombusiness expansion or the extension of business foundations.
For afﬁliated companies that request our involvement, we help
formulate and implement internal regulations and assist with
important decision-making. The Company’s statutory auditors
liaise with subsidiaries’ auditors to implement audit practices
and conﬁrm that subsidiaries are conducting these activities
properly.
(6) A system to ensure the trustworthiness of disclosuresrelating to ﬁnancial reports
To maintain the reliability of the corporate information provided
through annual security and other ﬁnancial reports, the Company
comprehensively gathers important information and thoroughly
discloses it in a timely and appropriate manner. To this end, wework to create disclosure systems, formulate and implement
internal regulations and create IT-compliant systems to transmit
and monitor information.
(7) A system to deal with reports to Auditors(3) Regulation and other systems that deal withloss-related risk management
The Company has established risk management procedures toensure the comprehensive and appropriate recognition andevaluation of the dangers of loss (risks) that could materially
impact management. A core management system is in place tocounter operating and other speciﬁc risks. By employing a ﬂatorganizational structure that encompasses representatives ofeach Group company and business unit, the system helps
prevent major risks from materializing, prevents recurrence andcontributes to swift responses. The system also enables theGroup to respond ﬂexibly to legal and regulatory changes andsudden changes in the business environment.
(4) A system to ensure efﬁcient execution of duties by
the Directors
The Company employs efﬁcient budget enforcement and othermanagement supervisory systems, with each business unit
responsible for its own proﬁts and losses. We have establisheda Group Management Meeting of directors, statutory auditors
and representatives of major subsidiaries. Taking a multifaceted
approach, this council addresses important topics that affectIn addition to legally stipulated items, the Company has created asystem for directors and employees to report swiftly to statutory
auditors any items with the potential to materially impact theCompany and Group companies. They can also report theimplementation status of internal audits and other signiﬁcant
information through the internal hotline.

(8) A system to ensure effective execution of
the Auditors’ audit
In the course of audits performed by statutory auditors,
employees and personnel report on the status of their businessactivities and provide materials related to their assigned duties.
As necessary, statutory auditors confer with accounting
auditors, attorneys and other specialists, and submit any
suggestions involving signiﬁcant revisions to the Board of
Directors. In the event that employees are required to assist in
the statutory auditors’ tasks, these personnel are assigned
speciﬁcally to auditing duties, in consideration of the need forindependence. Statutory auditors participate in deliberations
involving the selection of personnel.

20

Board of Directors and Auditors (As of June 30, 2008)

President

Minoru Sano

Senior Managing Director

Managing Director

Shigeki Tanaka

Yoshihiko Sano

Manufacturing technology /R&D division

Domestic division

Managing Director

Managing Director

Makoto Sato

Kazuo Wakatsuki

Pharmaceutical business

International division

Director

DirectorStanding Statutory Auditor

Masato Naganami

Hiroyuki Hattori

Takayuki Nomiya

Glass & material development division

Research & Development Laboratory

Director

Director

Statutory Auditor

Akihiko Yamabe

Kiyotaka Yoshioka

Masamichi Wada

Accounting & corporate planning division

Domestic division

Director

Director

Statutory Auditor

Hiroshi Ikeuchi

Toshiaki Masuda

Kiyoshi Kase

Human resources / general affairs division

Domestic division

Director

Noriaki Watanabe
International division

21

Representative Director

Financial Section

2008

23 Financial Review
27 10 year summary
29 Consolidated Balance Sheets
31 Consolidated Statements of Income
32 Consolidated Statements of Changes in Net Assets
33 Consolidated Statements of Cash Flows
34 Notes to Consolidated Financial Statements
45 Report of Independent Certified Public Accountantson The Consolidated Financial Statements
46 Corporate Information

22

Financial Review

Overview
In the ﬁscal year ended March 31, 2008, Japanese economy
was felt to be gradually deteriorating due to rise in the prices ofoil and raw materials and to the depreciation of U.S. dollar infear of the underperforming economy in the United States.
Meanwhile, drastic changes were taking place in the medical
ﬁeld with the progress of regenerative medicine and celltherapy, which has in turn made a very severe circumstance forour operations.
Under such circumstance, we have promoted to develop
innovative medical equipment in the ﬁelds of artiﬁcial organs
and regenerative medicine as well as made effort in thebusinesses of injection drug and oral drug, so as to establish aworldwide leading brand and to be a true global enterprise.

Consolidated Business Results
Net Sales
In the ﬁscal year ended March 31, 2008, consolidated net sales
amounted to ¥172.1 billion (US$1,717.9 million), a decrease of
6.6% compared with the previous ﬁscal year, mainly because of
the divestiture of the retail business which took place in theprevious period.
Net Sales by Business Segment
Medical Equipment
Net sales in this business rose 14.2% compared with theprevious ﬁscal year to ¥111.1 billion (US$1,108.7 million). Salesof artiﬁcial organs including dialysis products rose 17.0% to¥54.4 billion (US$543.0 million) and those of injection andinfusion related devices also rose 11.6% to ¥56.6 billion(US$564.9 million).
The domestic business environment remained severe
due to intensive sales competition caused by various factors
such as the performance-based classiﬁcation of dialyzers,
reinforced cost control at medical institutions and promotion of
joint purchases of medical consumables. Under suchcircumstances, we took several measures to expand ourmarket shares and increase in sales; we enhanced the sales
efﬁciency and increased the sales force. We also made efforts
to develop and market new products in the ﬁelds of dialysis,
vascular therapy, injection and infusion and examination, andpromote business expansion by means of systematized
product offerings.
Overseas, in spite of abrupt exchange ﬂuctuation, we
achieved a good sales growth by the reinforcement of sales
bases and product specialists. Especially, dialyzers, ourmainstay product, showed a steady result both by our own
brand marketing and by OEM. Dialysis machines made anoutstanding growth with new model machines and additional

Net Sales (Millions of yen)
2004
2005
2006
2007
2008

23

functions. We started promotion of oxygenator worldwide,
following the acquisition of business in the previous period.
Diabetes-related products also achieved strong growth, despite
harder price competition, thanks to the expansion of the market.
Pharmaceutical
Net sales in this business rose 15.7% compared with theprevious ﬁscal year to ¥48.8 billion (US$486.6 million). The
increase was mainly owing to the new consolidation of Saitama
Daiichi Pharmaceutical Co., Ltd. which manufactures external
medicines such as adhesive skin patch.
Market environment of this business was also very
severe, with governmental control on drug costs as part of the
medical administration reform and intensiﬁed sales competition.
Under the circumstances, we endeavored to expand sales ofour characteristic products such as pre-ﬁlled syringes and“liquid-and-powder” double bag kits. Sales of injectable kit
preparations including aforesaid items increased 3.6% to ¥14.9
billion (US$148.7 million). Sales of oral drugs leveled off in thisﬁscal year, affected by the termination of some contracts. Salesof external drugs amounted to ¥6.7 billion (US$66.9 million)
because of the new consolidation mentioned above.
Glass & Materials
Net sales in this business declined 11.5% compared with theprevious ﬁscal year to ¥11.4 billion (US$114.2 million). Glass forpharmaceutical containers generally showed a steady trend andsales increased 5.2% to ¥3.5 billion (US$34.9 million). On theother hand, sales of other glass materials dropped 17.3% to¥7.9 billion (US$78.9 million). This was mainly due to decreasein backlight-related materials, affected by the cost reduction
requirements of LCD panel makers.
Other
Sales of “Other” are mainly of machinery for manufacture of
medical equipment and real estate rental income. Net sales of“Other” decreased 17.7% to ¥0.8 billion (US$8.4 million) due todecline of real estate rental income.
Cost of Sales
The cost of sales decreased 6.8% compared with the previous
ﬁscal year to ¥123.1 billion (US$1,228.7 million). The main
reason for the decrease was the divestiture of retail business.
The ratio of cost of sales to net sales was 71.5% which was
almost at the same level as the previous period. As a result,gross proﬁt decreased 6.2% compared with the previous ﬁscal
year to ¥49.0 billion (US$489.1 million).
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased 9.8%
compared with the previous ﬁscal year to ¥35.3 billion

Operating Income (Millions of yen)
188,700
192,320
206,801
184,363
172,113

2004
2005
2006
2007
2008

12,557
10,404
12,332
13,053
13,677

Income Before Income Taxes
and Minority Interests (Millions of yen)
2004
2005
2006
2007
2008

8,044
8,660
9,061
16,7768,260

(US$352.6 million), mainly due to decrease in salaries and rent
resulting from the divestiture of retail business.
Operating Income
As a result of the above-mentioned factors, operating income
rose 4.8% to ¥13.7 billion (US$136.5 million). The ratio of
operating income to net sales improved 0.9 percentage points
to 8.0%.
Operating Income by Business Segment
Medical Equipment
Operating income of Medical Equipment business rose 10.4%
to ¥15.8 billion (US$158 million). Proﬁt from increased sales
covered the increased depreciation expense from newinvestments for expanding manufacturing capacity of dialyzers
at the Company’s Odate factory.
Pharmaceutical
Operating income of Pharmaceutical business slightly
decreased 0.8% to ¥3.3 billion (US$32.6 million). New
consolidation of Saitama Daiichi Pharmaceutical Co., Ltd. madea contribution to income, however, Nipro Pharma Corporation’s
Odate factory incurred loss from newly introduced
manufacturing lines due to low capacity utilization.
Glass & Materials
Operating income of Glass & Materials business increased
1.3% compared with the previous ﬁscal year to ¥1.9 billion(US$18.9 million), by the cost reduction and increase in thesales of products with higher proﬁt margin.
Other
Operating income of “Other” decreased 91.3% compared withthe previous ﬁscal year to ¥0.01 billion (US$0.1 million) due todecrease in net sales.
Elimination/Corporate
The unallocable corporate costs, which consisted mainly of the
R&D-related expenses and headquarters administration
expenses, increased 6.7% compared with the previous ﬁscal
year to ¥7.3 billion (US$73.1 million) mainly due to the increasein the pharmaceutical R&D costs.
Other Income (Expenses)
We recorded other expenses of ¥5.4 billion (US$54.1 million)
compared with the other income of ¥3.7billion in the previous
year. In the previous ﬁscal year, we recorded a gain on sale ofinvestments in consolidated subsidiaries for ¥12.7 billion. On
the other hand, in the ﬁscal year under review, we recorded
exchange loss of ¥3.2 billion (US$31.6 million) as a result of therevaluation of assets denominated in U.S. dollars. In the

Net Income (Millions of yen)
2004
2005
2006
2007
2008

previous ﬁscal year, we recorded loss on impairment of ¥1.3
billion, allowance for loss on business clearance of ¥2.0 billion
and extraordinary loss on doubtful debt of ¥2.4 billion in relation
to the divestiture of retail business. In the ﬁscal year underreview, no such exceptional item was recorded.
Income before Income Taxes and Minority Interests
As a result of the factors outlined above, income before income
taxes and minority interests declined 50.8% compared with theprevious ﬁscal year to ¥8.3 billion (US$82.4 million).
Net Income
The effective tax rate for corporate taxes following deferred tax
accounting was 45.9% compared with 48.8% for the previous
ﬁscal year. Minority interests showed income of ¥0.01 billion(US$0.1 million). As a result, net income declined 47.9% to¥4.5 billion (US$44.5 million). Basic earnings per commonshare amounted to ¥70.2 (US$0.70) compared with ¥134.7 of
the previous ﬁscal year. Cash dividends per common shareamounted to ¥37.5 (US$0.37) compared with ¥80.0 of theprevious ﬁscal year.
Net Sales and Operating Income by Geographic Segment
In Japan, net sales decreased 13.1% compared with theprevious ﬁscal year to ¥135.6 billion (US$1,353.5 million) due todivestiture of retail business. Operating income, however,increased 8.1% to ¥22.0 billion (US$220.0 million) owing to theincrease in transaction volume of Medical Equipment business.
In America, net sales rose 20.3% compared with theprevious ﬁscal year to ¥20.9 billion (US$208.7 million) due toincrease in sales of dialysis-related and oxygenator-related
products. However, this segment recorded an operating loss of¥1.7 billion (US$16.6 million) for the ﬁscal year under review,
because a Brazilian subsidiary made a loss from exports
affected by the weak U.S. dollar and anticipatory investment insales force. Another factor of the operating loss was theexpenses of a development-stage company in the United States.
In Europe, net sales rose 29.2% compared with theprevious ﬁscal year to ¥9.2 billion (US$ 91.6 million) as a resultof the establishment of new sales network and increase in tradeof dialysis-related products. Operating income also increased
51.0% to ¥0.2 billion (US$2.1 million).
In Asia, net sales rose 67.4% compared with theprevious ﬁscal year to ¥6.4 billion (US$64.1 million) owing to theincrease in sales of dialysis-related and oxygenator-related
products. Operating income rose 109.9% to ¥1.0 billion(US$9.5 million) thanks to the improvement in manufacturing
proﬁtability at factories.

Capital Expenditures (Millions of yen)
4,216
4,519
4,513
8,555
4,454

2004
2005
2006
2007
2008

14,50016,312
20,87423,09325,900Total Assets (Millions of yen)
2004
2005
2006
2007
2008

279,701
293,749
338,741
336,660
349,30224

Financial Review

Financial Position

Basic Policy on Distribution of Proﬁts

Total assets at March 31, 2008 stood at ¥349.3 billion(US$3,486.4 million), an increase of 3.8% from the end of theprevious ﬁscal year. Current assets increased 10.5% from theend of the previous ﬁscal year to ¥162.7 billion (US$1,624.4
million), due mainly to the increase in trade receivables andinventories. Property, plant and equipment, net of accumulated
depreciation, increased 13.3% from the end of the previous
ﬁscal year to ¥118.8 billion (US$1,185.9 million) as a result ofactive investments in manufacturing facilities. Capital
investments in property, plant and equipment totaled ¥24.7
billion (US$246.8 million). By business segment, capital
investments amounted to ¥15.3 billion (US$153.1 million) in
the Medical Equipment business and ¥8.3 billion (US$82.8
million) in the Pharmaceutical business. Investment and otherassets decreased 19.9% to ¥67.7 billion (US$676.2 million),
due mainly to the decrease in investment securities affected by
the sluggish stock market.
Current liabilities increased 4.5% from the end of theprevious ﬁscal year to ¥108.8 billion (US$1,086.3 million),
mainly due to the increase in current portion of long-term debt.
Long-term liabilities also increased 14.6% from the end of theprevious ﬁscal year to ¥120.9 billion (US$1,206.9 million), owing
to the increase in long-term debt.
Total net assets decreased 5.9% from the end of theprevious ﬁscal year to ¥119.5 billion (US$1,193.2 million), due tothe decrease in unrealized gain of available-for-sale securities.

Our policy is that 50% of non-consolidated net income is to be
distributed to shareholders. Employees’ bonuses are
determined according to the business performance of thedivision to which the employees belong. Bonuses for directors
and statutory auditors are determined on the basis of corporate
business performance.
Retained earnings are invested in sales and production
facilities as well as in R&D, with a view to establishing the ﬁrm
management basis and long-term business development,
which in turn should ensure stable proﬁts in the future.

Cash Flow
Net cash provided by operating activities decreased 33.7%
compare with the previous ﬁscal year to ¥9.7 billion (US$96.6
million), mainly because net income decreased and thepayment of income taxes increased. Net cash used in investing
activities amounted to ¥30.1 billion (US$300.2 million), mainlyfor purchase of property, plant and equipment. Net cash
provided by ﬁnancing activities amounted to ¥22.2 billion(US$222.3 million), due to the increased long-term loans andissuance of bonds.
As a result, net cash and cash equivalents increased¥1.5 billion (US$15.4 million) compared with the end of previous
ﬁscal year to ¥47.7 billion (US$475.7 million).

Staff
Total number of employees at the end of the ﬁscal year underreview increased 213 compared with the end of the previous
ﬁscal year to 9,020. Employees in Japan increased 347 to
4,422, and the overseas employees decreased 134 to 4,598.

Net Assets (Millions of yen)
2004
2005
2006
2007
2008

25

Risk Factors
The following are risks that may have an effect on the Nipro
Group’s results of operations and/or its ﬁnancial condition. The
items concerned were determined as at March 31, 2008.
(1) Risks Related to Product Safety
The Nipro Group brings all of its capabilities to bear in securing
product safety in the design, development and manufacturing of
medical equipment and pharmaceutical products. There are still
the risks, however, that accidental defects or side-effects could
result in damages to a third party and our being sued for liability.
To cover these risks, we therefore maintain generalliability and product liability insurance. In the unlikely event of a
successful claim in excess of the insurance coverage, however,there could be a material adverse effect on our results ofoperations and ﬁnancial condition.
(2) Risks Related to Supplier Concentration
The Nipro Group procures materials and parts for its operations
from a large number of suppliers. Some key materials or parts
may be obtained only from a single supplier or a limited groupof suppliers. If circumstances at any of these suppliers make it
impossible for us to acquire a sufﬁcient quantity of materials orparts to meet our production needs in a timely andcost-effective manner, there could be a material adverse effecton our results of operations and ﬁnancial condition.
(3) Risks Related to Changes in Government Healthcare
Policies
The business sector to which the Nipro Group belongs is
intimately connected with the healthcare system and is subject
to the regulations laid out by the government organizations,
including the National Health Insurance System and thePharmaceutical Affairs Law. Should circumstances arise inwhich we were unable to respond to changes in theenvironment brought about by unforeseeable wholesalechanges in the government healthcare policies, there could be

Basic Earnings Per Share (yen)94,711
96,700112,391
125,651
118,156

2004
2005
2006
2007
2008

64.9
69.4
69.6
134.7
70.2

Number of Employees
2004
2005
2006
2007
2008

8,132
8,617
9,048
8,807
9,020

a material adverse effect on our results of operations andﬁnancial condition.
(4) Risks Related to Changes in Sale Prices
The products sold by the Nipro Group include some that are, in
general, subject every two years to the effect of price reductionsin the system of payment for medical care, drug prices andreimbursement prices for medical materials and supplies.
Should measures to hold down medical costs also become
pervasive worldwide, resulting in intensiﬁed competition
between corporations and leading to prices falling to a greater
degree than anticipated, there could be a material adverse
effect on our results of operations and ﬁnancial condition.
(5) Risks Related to Changes in Prices of Raw Materials
The products manufactured by the Nipro Group include somethat are made from petrochemical products such as plastics.
Should the cost of such raw materials rise, there could be amaterial adverse effect on our results of operations andﬁnancial condition.
(6) Risks Related to Overseas Expansion
The Nipro Group maintains manufacturing bases and salesofﬁces around the world for the production and supply of its
products. Should there be unexpected revisions to legal
regulations or political or economic changes in these countries
or regions, there could be a material adverse effect on our
results of operations and ﬁnancial condition.
(7) Risks Related to Intellectual Property
The Nipro Group owns numerous patents and trademarks, andmaintains various proprietary rights for the products it
manufactures. Additionally, we take all possible measures toavoid infringing on the patents and proprietary rights of any
third party, and to avoid breaching any license agreements wehave concluded concerning technologies. Nevertheless, if anunanticipated claim for damages were to be made by a third
party and the defense of the Nipro Group were to be rejected,
there could be a material adverse effect on its results ofoperations and ﬁnancial condition.
(8) Risks Related to Environmental Regulations
The Nipro Group believes it has taken adequate precautions tocomply with applicable regulations in the course of its businessactivities. Should our activities cause an unforeseen
environmental problem, however, with a claim for damages
made against us, there could be a material adverse effect on
our results of operations and ﬁnancial condition.
(9) Risks Related to Exchange Rate Fluctuations
The Nipro Group, including its overseas subsidiaries, carries out

Equity Ratio (%)
2004
2005
2006
2007
2008

its foreign currency transactions primarily in US dollars andeuro, but calculates ﬁnancial statements for its overseas
subsidiaries using Japanese yen for the purpose of producing
consolidated ﬁnancial statements. Fluctuations in exchange
rates may therefore have a material adverse effect on our
results of operations and ﬁnancial condition.
(10) Risks Related to Investment Value
The Nipro Group’s assets include investments in stocks andother securities. These investments have been made forpurposes such as building good business relationships with theissuers of such securities, or for gathering useful information forthe development of new products or for new business
opportunities. Should the value of these investments decline
signiﬁcantly owing to ﬂuctuations in the stock market,
circumstances at an issuer, or a change in the accounting
methods used to deal with these investments, there could be amaterial adverse effect on our results of operations andﬁnancial condition.
(11) Risks Related to controls on Personal Information
The Nipro Group set the strict precautions to protect the
conﬁdential personal information that the Group possesses. In
the unforeseen events or accidents that the personal
information is leaked outside the Group, causing loss of trust or
customers, there could be a material adverse effect on its
results of operations and ﬁnancial condition.
(12) Risks Related to Litigation
On December 7, 2007, a damage suit was ﬁled at the Tokyo
Higher Court by Naigai Co., Ltd. and Naigai Glass Kogyo Co.,
Ltd. against the Company, based on the 25th article of theantitrust law. The claimed amount was ¥2,032 million(US$20,281 thousand). The Company is arguing, among
others, the occurrence of the damage and the correlation
between the act and the damage. Should the defense of theCompany be unsuccessful and a judgment to order thepayment of compensation be given to the Company, there
could be a material adverse effect on our results of operations
and ﬁnancial condition.
(13) Other Risks
Fire, earthquake, terrorist act, war, epidemic, or other
unforeseen man-made or natural disasters affecting areas or
facilities where the Nipro Group conducts its businessactivities may possibly cause a delay or interruption in
production, sales, distribution, or provision of services. Shouldsuch a delay or interruption become extended, there could bea material adverse affect on our results of operations andﬁnancial condition.

Return on Assets (%)
33.9
32.9
33.2
37.3
33.8

2004
2005
2006
2007
2008

Return on Equity (%)
4.7
3.6
3.9
3.9
4.0

2004
2005
2006
2007
2008

4.7
4.7
4.3
7.2
3.7

26

10 year summary
Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31

Millions of yen

2008
Income Statement Data:
Net sales ............... .......................................................... . . . . . . . . .
Medical Equipment ................................................. . . . . . . . . .
Pharmaceutical ........................................................ . . . . . . . . .
Glass and Materials ................................................. . . . . . . . . .
Store ................ .......................................................... . . . . . . . . .
Cost of sales ................................................................. . . . . . . . . . .
Selling, general and administrative expenses ......... . . . . . . . . . .
Operating income ......................................................... . . . . . . . . .
Medical Equipment (1) ........................................... . . . . . . . . . .
Pharmaceutical (1) ................................................... . . . . . . . . .
Glass and Materials (1) ........................................... . . . . . . . . .
Store (1) ..................................................................... . . . . . . . . .
Income before income taxes and minority interests . . . . . . . .
Net income .................................................................... . . . . . . . . .
Capital expenditures ..................................................... . . . . . . . . .
Depreciation and amortization .................................. . . . . . . . . . .
R&D expenses .... .......................................................... . . . . . . . . .
Balance Sheet Data :Total assets .................................................................... . . . . . . . . .
Property, plant and equipment-net ............................ . . . . . . . . .
Working capital ... .......................................................... . . . . . . . . .
Current liabilities .. .......................................................... . . . . . . . . .
Long-term liabilities ..................................................... . . . . . . . . . .
Common stock ... .......................................................... . . . . . . . . .
Capital surplus ............................................................... . . . . . . . . .
Net assets (2) ................................................................. . . . . . . . . .

2007

2006

2005

¥

172,113
111,084
48,754
11,437—
123,108
35,32813,677
15,830
3,271
1,890
—
8,260
4,454
25,90015,054
6,194¥

184,363
97,30042,152
12,91930,973
132,142
39,16813,053
14,334
3,298
1,865
270
16,776
8,555
23,093
12,4704,461¥

206,801
90,86835,22011,934
67,261
149,971
44,49812,332
13,430
2,111
1,836
578
9,061
4,513
20,874
12,315
3,760¥

192,320
82,504
26,207
11,667
70,841140,072
41,844
10,404
11,039
2,261
1,889
115
8,660
4,519
16,312
10,266
3,422¥

349,302
118,81253,911
108,835
120,923
28,66329,975
118,156¥

336,660
104,882
43,128104,105
105,535
28,66329,973
125,651¥

338,741
106,195
34,579111,285
113,453
28,66329,972
112,391¥

293,749
98,78839,12396,242
99,19828,66329,972
96,70069.6—
37.5
1,767.7

¥

69.4
—
38.5
1,519.6Yen

Per share data :Basic earnings (3) ......................................................... . . . . . . . . .
Diluted earnings (3) ...................................................... . . . . . . . . . .
Cash dividends .... .......................................................... . . . . . . . . .
Equity ............................................................................. . . . . . . . . . .

¥

70.2
—
37.5
1,861.8

¥

134.7
—
80.0
1,979.2¥

Number of common shares issued ............................... . . . . . . . . . .
Number of employees ..................................................... . . . . . . . . . .

63,878,505
9,020

63,878,505
8,807

63,878,505
9,048

63,878,505
8,617

Selected Data and Ratios :Equity ratio (4) (%) ...................................................... . . . . . . . . . .
Return on assets (4) (%) ........................................... . . . . . . . . . .
Return on equity (4) (%) ............................................ . . . . . . . . . .
Price earnings ratio (4) (times) .................................. . . . . . . . . . .

33.8
4.0
3.7
24.8

37.3
3.9
7.2
17.1

33.2
3.9
4.3
26.0

32.9
3.6
4.7
25.6

Note :(1) Operating income at the operating segment level is not adjusted for intra-segment transactions. See note 13 to the consolidated ﬁnancial statements.
(2) Effective April 1, 2006, the Company adopted a new accounting standard for presentation of net assets in the balance sheet issued by the Accounting Standard
Board of Japan. In the new accounting standard, net assets refer to the sum of total shareholders’ equity, total valuation and translation adjustments and others,
and minority interests. Minority interests, however, have not been included in net assets above to conform to the prior years’ presentation.
(3) Effective April 1, 2002, the Company adopted a new accounting standard for earnings per share of common stock issued by the Accounting Standards Boardof Japan. Basic earnings and diluted earnings per share for the year ended March 31, 2003 and thereafter are computed in accordance with the new standard.
Basic earnings and diluted per share for the prior years are not translated to reﬂect the new standard’s provision, based on the weighted average number of27

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

2004

2003

2002

2001

2000

1999

2008

¥

188,700
78,72725,33911,891
71,357137,153
38,99012,557
12,117
2,471
1,819
420
8,044
4,216
14,500
9,819
3,074

¥

180,370
76,00921,97911,06469,560128,776
36,695
14,89914,175
1,981
1,777
1,109
8,781
5,078
20,775
8,767
2,328

¥

171,217
77,572
15,946
11,23464,764122,092
34,69014,43515,016
1,104
1,806
1,037
11,617
5,842
17,166
7,215
2,553

¥

152,072
66,413
14,12011,78456,882
110,608
31,735
9,729
11,913
844
1,773
20
6,641
3,401
14,295
6,898
3,048

¥

143,700
65,71813,47812,021
51,034
104,734
30,344
8,622
10,422
516
1,758
637
5,930
2,621
8,463
7,124
2,278

¥

141,635
64,73011,96911,907
51,199101,965
29,328
10,342
12,272
71
1,780
888
4,440
1,793
12,3626,681
2,889$ 1,717,866
1,108,734
486,615
114,153—
1,228,745
352,610
136,511
158,000
32,64818,864—82,44444,456
258,510150,255
61,823¥279,701
94,00528,57096,36486,932
28,66329,972
94,711¥

252,848
91,14727,542
88,88978,65728,66329,972
83,533¥

245,403
81,029
9,792
105,764
61,952
23,11324,43576,099¥228,918
72,06135,77074,99583,26022,56323,886
69,196¥

217,455
64,49752,06575,00875,58522,56323,88665,368¥205,558
62,91944,82073,39864,47822,56323,88665,563$ 3,486,396
1,185,867
538,087
1,086,286
1,206,937
286,086
299,182
1,179,319
U.S. dollars(Note 1)

Yen

¥

64.9
—
30.5
1,487.5

¥

84.3
78.5
32.0
1,310.7

¥

104.4
92.4
47.0
1,343.7

¥

60.8
54.3
31.0
1,236.6

¥

46.9
42.1
34.5
1,168.2

¥

32.0
28.1
19.0
1,171.7

63,878,505
8,132

63,878,505
8,029

56,670,149
7,835

55,956,987
6,818

55,956,987
6,636

55,956,987
6,064

33.9
4.7
4.7
24.1

33.0
6.0
6.4
21.5

31.0
6.1
8.0
17.4

30.2
4.4
5.1
16.5

30.1
4.1
4.0
18.6

31.9
5.3
2.7
34.6

$

0.70
—
0.37
18.58

outstanding shares for the period.
(4) Equity ratio is the ratio of the sum of total shareholders’ equity and total valuation and translation adjustments and others to total assets at the period end.
Return on assets is the ratio of operating income for the period to average of total assets during the period. Return on equity is the ratio of net income for theperiod to average of the sum of total shareholders’ equity and total valuation and translation adjustments and others during the period. Price earnings ratio is theratio of the closing price of the Company’s shares listed on the First Section of the Tokyo Stock Exchange on the last trading day in March of each year to basic
earnings per share.

28

Consolidated Balance Sheets
Nipro Corporation and its Consolidated Subsidiaries
As of March 31, 2008 and 2007
Thousands of U.S. dollars(Note 1)Millions of yen

2008

2007

2008

AssetsCurrent assets:
Cash and cash equivalents ................................... . . . . . . . . . . . . . . . . . ¥47,657

Time deposits (over three months) ....................... . . . . . . . . . . . . . . . .

1,812

1,825

18,086

Trade notes and accounts receivable (Note 5 and 11) . . . . .

53,50750,972534,055

Allowance for doubtful receivables ....................... . . . . . . . . . . . . . . . .

(474)

(502)

(4,731)Inventories (Note 3) ................................................. . . . . . . . . . . . . . . . .

48,077

40,213479,858

Deferred income taxes (Note 4) ........................... . . . . . . . . . . . . . . . . .

2,902

3,034

28,965

Other current assets .............................................. . . . . . . . . . . . . . . . . .

9,265

5,581

92,475

Total current assets ......................................... . . . . . . . . . . . . . . . . .

162,746

147,233

1,624,374

Land .......................................................................... . . . . . . . . . . . . . . . . .

19,41318,032

193,762

Buildings and structures ........................................ . . . . . . . . . . . . . . . . .

95,00579,482

948,248

Machinery and equipment .................................... . . . . . . . . . . . . . . . . .

125,897

103,814

1,256,583

Construction in progress ........................................ . . . . . . . . . . . . . . . .

11,22012,857111,987

251,535

214,185

2,510,580

Accumulated depreciation .................................... . . . . . . . . . . . . . . . . .

(132,723)(109,303)(1,324,713)

Property, plant and equipment-net ............... . . . . . . . . . . . . . . . .

118,812

104,882

1,185,867

method ........ ......................................................... . . . . . . . . . . . . . . . .

3,397

3,382

33,906

Investment securities (Note 7) ............................... . . . . . . . . . . . . . . . .

56,52873,922564,208

Lease deposits ......................................................... . . . . . . . . . . . . . . . .

2,266

2,591

22,617

Deferred income taxes (Note 4) ............................ . . . . . . . . . . . . . . . .

159

62

1,587

Other ................. ......................................................... . . . . . . . . . . . . . . . .

5,394

4,588

53,837

Total investments and other assets ............... . . . . . . . . . . . . . . . .

67,74484,545676,155

Total ........................... ......................................................... . . . . . . . . . . . . . . . . ¥ 349,302¥ 336,660$ 3,486,396¥

46,110$475,666

Property, plant and equipment (Note 5 and 6) :Investments and other assets :Investment in unconsolidated subsidiaries
and an afﬁliate accounted for by the equity

The accompanying notes are an integral part of these statements.

29

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

2008

2007

2008

Liabilities, and net assets
Current liabilities :Short-term bank loans (Note 9) ................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥28,221

Current portion of long-term debt (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,16423,305301,068

Trade notes and accounts payable ......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,00926,547

299,521

Accrued income taxes ................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,226

8,405

22,218

Accrued expenses ...................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,269

9,348

92,514

Allowance for loss on clearance of business . . . . . . . . . . . . . . . . . . . . . . . .

1,955

1,955

19,513

Other current liabilities ................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,991

7,581

69,777

Total current liabilities ........................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108,835

104,105

1,086,286

Long-term debt (Note 9) ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106,705

84,216

1,065,026

Accrued pension and severance liabilities (Note 10) . . . . . . . . . . .

2,129

2,565

21,250

Deferred income taxes (Note 4) ................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,833

17,417

98,144

Other long-term liabilities ........................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,256

1,337

22,517

Total long-term liabilities ...................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120,923

105,535

1,206,937

28,663

28,663

286,086

Capital surplus ............................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,97529,973299,182

Retained earnings ........................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39,477

39,149394,021Less cost of common shares of treasury stock . . . . . . . . . . . . . . . . . . .

(795)

(741)

(7,935)

Total shareholders’ equity .................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97,32097,044

971,354

Unrealized gain on available-for-sale securities . . . . . . . . . . . . . . . . . . . .

18,94829,884

189,121

Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,888(1,277)

18,844

Total valuation and translation adjustments and others . . .

20,83628,607

207,965

Minority interests ......................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,388

1,369

13,854

Total net assets ..................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119,544

127,020

1,193,173

Total ...................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 349,302¥ 336,660$ 3,486,396¥

26,964$

281,675

Long-term liabilities :Commitments and contingent liabilities (Note 11)
Net Assets (Note 12) :Common stock ............................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Authorized : 200,000,000 shares
Issued : 63,875,505 shares(415,037shares in 2008 and 393,067 shares in 2007)

The accompanying notes are an integral part of these statements.

30

Consolidated Statements of Income
Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2008 and 2007
Thousands of U.S. dollars(Note 1)Millions of yen

2008
Net sales .......................................................................... . . . . . . . . . . . . . . . . . ¥ 172,113

2007

2008

¥ 184,363$ 1,717,866

Cost of sales .......... ......................................................... . . . . . . . . . . . . . . . .

123,108

132,142

1,228,745

Gross proﬁt ...... ......................................................... . . . . . . . . . . . . . . . .

49,00552,221

489,121

Selling, general and administrative expenses (Note 14 and 15)

35,32839,168352,610

Operating income ................................................... . . . . . . . . . . . . . . . . .

13,677

13,053

136,511

Interest and dividend income ............................... . . . . . . . . . . . . . . . . .

1,100

869

10,979Interest expense (Note 9) ....................................... . . . . . . . . . . . . . . . .

(1,951)(1,645)(19,473)

plant and equipment - net ................................. . . . . . . . . . . . . . . . .

(620)

(485)

(6,188)Exchange gain (loss) .............................................. . . . . . . . . . . . . . . . . .

(3,169)314(31,630)

Equity in proﬁt (loss) of an afﬁliated company ... . . . . . . . . . . . . . . . . .

16

(791)

160

Gain on sale of investments in consolidated subsidiaries . . .

—12,706—

Loss on impairment of ﬁxed assets (Note 6) ..... . . . . . . . . . . . . . . . . .

—(1,287)—

Abnormal manufacturing cost ............................... . . . . . . . . . . . . . . . .

Other income (expenses) :Loss on sale and disposal of property,

(167)

(246)

(1,667)

Allowance for loss on clearance of business ..... . . . . . . . . . . . . . . . . .

—(1,955)—

Loss on doubtful debts ......................................... . . . . . . . . . . . . . . . . .

—(2,361)—

Loss on disposal of inventories ............................. . . . . . . . . . . . . . . . .

(139)

(253)

(1,387)

Loss on investment securities ............................... . . . . . . . . . . . . . . . .

—

(269)

—

Other income (loss)-net ......................................... . . . . . . . . . . . . . . . . .

(487)

(874)

(4,861)

Income before income taxes and minority interests . . . . . . . .

8,260

16,77682,444Current ..................................................................... . . . . . . . . . . . . . . . . .

3,758

10,05937,509Deferred .................................................................... . . . . . . . . . . . . . . . .

37(1,873)

369

11

35

110

Income taxes (Note 2 and 4) :Minority interests in income (loss) ofconsolidated subsidiaries ..................................... . . . . . . . . . . . . . . . . .
Net income ...... ......................................................... . . . . . . . . . . . . . . . .

¥

4,454

¥

8,555

$

44,456

U.S. dollars(Note 1)

Yen

Amounts per common share (Note 2) :Basic earnings ......................................................... . . . . . . . . . . . . . . . . . ¥70.2

Diluted earnings ....................................................... . . . . . . . . . . . . . . . .

—

—

—

Cash dividends ......................................................... . . . . . . . . . . . . . . . .

37.5

80.0

0.37

The accompanying notes are an integral part of these statements.

31

¥

134.7

$

0.70

Consolidated Statements of Changes in Net Assets
Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2008 and 2007

Thousands
Outstanding
number ofshares ofcommon stock

Millions of yen
Commonstock

CapitalsurplusRetainedearnings

Balance at March 31, 2006 ..... 63,529 ¥ 28,663 ¥ 29,972 ¥ 34,546

Treasurystock

Foreign
Unrealized
Total valuation
Total
currency and translation Minority
gain onshareholders’ available-fortranslation
adjustmentsinterests
equitysale securities adjustments
and others¥ (649) ¥ 92,532 ¥ 25,564 ¥ (5,705) ¥ 19,859

Total
net assets¥ 1,612 ¥ 114,003

Net income .........................

8,555

8,555

8,555

Cash dividends ..................

(4,097)(4,097)(4,097)

(91)

(91)

(91)

(101)

(101)

(101)

9

10

10

437

437

437

(201)

(201)

(201)

Bonuses to directors
and statutory auditors ...
Purchase of treasury stock ....

(49)

Disposal of treasury stock ....

5

1

Increase (decrease) in retained
earnings due to exclusion ofsubsidiaries from consolidation ...
Increase (decrease) in retained
earnings due to inclusion of new
subsidiaries in consolidation ...
Other net change during the year ...
Balance at March 31, 2007......

63,48528,66329,97339,149

(741)

—

4,320

4,428

8,748

(243)

8,505

97,04429,884(1,277)28,6071,369

127,020

Net income .........................

4,454

4,454

4,454

Cash dividends ..................

(4,126)(4,126)(4,126)

(65)

(65)

(65)

11

13

13

Purchase of treasury stock ...

(28)

Disposal of treasury stock ...

62— (10,936)

Other net change during the year ...
Balance at March 31, 2008 ..... 63,463 ¥ 28,663 ¥ 29,975 ¥ 39,477

Balance at March 31, 2007......

(7,771)¥ (795) ¥ 97,320 ¥ 18,948 ¥ 1,888 ¥ 20,836

19(7,752)¥ 1,388 ¥ 119,544

Thousands of U.S. dollars (Note 1)

Thousands
Outstanding
number ofshares ofcommon stock

3,165

Commonstock

CapitalsurplusRetained Treasury
earnings
stock

Unrealized
Foreign
Total valuation
Total
gain oncurrency
and translation Minority
shareholders’ available-fortranslation
adjustments interests
equitysale securities adjustments
and others

Total
net assets

63,485 $ 286,086 $ 299,162 $ 390,748 $ (7,396) $ 968,600 $ 298,273 $ (12,746) $ 285,527 $ 13,664 $ 1,267,791

Net income .........................

44,45644,45644,456

Cash dividends ..................

(41,183)(41,183)(41,183)

(649)

(649)

(649)

110

130

130

Purchase of treasury stock ...

(28)

Disposal of treasury stock ...

6

Balance at March 31, 2008 .....

20—

Other net change during the year ...

(109,152)

31,590(77,562)190(77,372)

63,463 $ 286,086 $ 299,182 $ 394,021 $ (7,935) $ 971,354 $ 189,121 $ 18,844 $ 207,965 $ 13,854 $ 1,193,173

The accompanying notes are an integral part of these statements.

32

Consolidated Statements of Cash Flows
Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2008 and 2007
Thousands of U.S. dollars(Note 1)Millions of yen

2008

2008

Operating activities :Net income ............... .......................................................... . . . . . . . . . . . . . . . ¥Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ........................................ . . . . . . . . . . . . . . . .
Loss on impairment of ﬁxed assets ................................. . . . . . . . . . . . . . . .
Equity in loss (proﬁt) of an afﬁliated company ................... . . . . . . . . . . . . . . .
Allowance for doubtful receivables ................................. . . . . . . . . . . . . . . . .
Loss on doubtful debts .................................................. . . . . . . . . . . . . . . . .
Allowance for loss on business clearance ....................... . . . . . . . . . . . . . . . .
Gain on sale of investments in consolidated subsidiaries ..... . . . . . . . . . . . . . . .
Provision for deferred taxes ............................................. . . . . . . . . . . . . . . .
Exchange loss (gain) ....................................................... . . . . . . . . . . . . . . .
Loss on sale and disposal of property, plant and equipment-net . . . . . . . . . .
Other, net .............. .......................................................... . . . . . . . . . . . . . . .

15,054
—
(16)
(75)
—
—
—
37
286
619
780

12,470
1,287
791
(93)
2,361
1,955
(12,706)(1,873)
(68)
485
1,222

150,255
—
(160)
(749)
—
—
—
369
2,855
6,178
7,785

Changes in operating assets and liabilities :Trade receivables .. ......................................................... . . . . . . . . . . . . . . . .
Inventories ............ .......................................................... . . . . . . . . . . . . . . .
Other current assets ....................................................... . . . . . . . . . . . . . . .
Lease deposits ..... ......................................................... . . . . . . . . . . . . . . . .
Trade payables ..... ......................................................... . . . . . . . . . . . . . . . .
Accrued income taxes ................................................... . . . . . . . . . . . . . . . .
Other, net ....................................................................... . . . . . . . . . . . . . . .
Total adjustments ........................................................ . . . . . . . . . . . . . . .
Net cash provided by operating activities ................... . . . . . . . . . . . . . . . .

2,608(6,650)
754
325
(464)
(6,178)(1,859)
5,221
9,675

(2,187)(3,061)(565)
502(1,982)
5,072
2,419
6,029
14,584

26,030(66,374)
7,526
3,244
(4,631)(61,663)(18,555)
52,11096,566(24,802)182(1,015)—(19,236)273(2,245)24(247,550)
1,817(10,131)—(3,125)(1,220)(31,191)—(1,029)3(287)(30,073)

19,372(1,078)1,873(687)(2,924)—(10,270)30(2,864)(300,159)(2,787)
33,775(24,325)
19,880(60)—(4,120)—(95)
22,268122
20,853(13,181)—(10,060)(9,000)(4,091)(97)(297)(15,751)(27,817)337,109(242,789)
198,423(599)—(41,122)—(948)
222,257

(323)
1,547
46,110209(3,882)
49,915(3,224)
15,440460,226

Investing activities :Purchase of property, plant and equipment ......................... . . . . . . . . . . . . . . .
Proceeds from sale of property, plant and equipment ............. . . . . . . . . . . . . . . . .
Purchase of available-for-sale securities ............................. . . . . . . . . . . . . . . . .
Proceeds from sale of investment securities ....................... . . . . . . . . . . . . . . . .
Purchase of investments in consolidated subsidiaries
affecting scope of consolidation ..................................... . . . . . . . . . . . . . . . .
Proceeds from sales of investments in consolidated
subsidiaries affecting scope of consolidation ................... . . . . . . . . . . . . . . .
Net decrease (increase) in short-term loans to afﬁliates ....... . . . . . . . . . . . . . . . .
Deposits (Over three months) ............................................. . . . . . . . . . . . . . . . .
Other, net ........................................................................... . . . . . . . . . . . . . . .
Net cash used in investing activities ........................... . . . . . . . . . . . . . . . .
Financing activities :Net increase (decrease) in short-term loans ......................... . . . . . . . . . . . . . . .
Proceeds from long-term loans .......................................... . . . . . . . . . . . . . . . .
Repayment of long-term loans ........................................... . . . . . . . . . . . . . . . .
Proceeds from issuance of bonds ....................................... . . . . . . . . . . . . . . .
Repayment of bonds ......................................................... . . . . . . . . . . . . . . . .
Net increase (decrease) in commercial paper ..................... . . . . . . . . . . . . . . . .
Cash dividends paid ........................................................... . . . . . . . . . . . . . . .
Bonuses to directors and statutory auditors ....................... . . . . . . . . . . . . . . . .
Other, net ................. ......................................................... . . . . . . . . . . . . . . . .
Net cash provided by (used in) ﬁnancing activities ....... . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . .
Net increase (decrease) in cash and cash equivalents ....... . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period ................. . . . . . . . . . . . . . . . .
Cash and cash equivalents of newly consolidated
subsidiary, beginning of period ....................................... . . . . . . . . . . . . . . .
Cash and cash equivalents, end of period .......................... . . . . . . . . . . . . . . . . ¥The accompanying notes are an integral part of these statements.

33

2007

4,454

—
47,657

¥

¥

8,555

77
46,110$$44,456—475,666

Notes to Consolidated Financial Statements
Nipro Corporation and its Consolidated Subsidiaries

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated ﬁnancial statements areprepared from the consolidated ﬁnancial statements issued fordomestic reporting purposes. Nipro Corporation (the “Company”)
and its domestic consolidated subsidiaries maintain theiraccounts and records in accordance with the provisions set
forth in the Japanese Securities and Exchange Law and its
related accounting regulations, and in conformity with generally
accepted accounting principles and practices in Japan. Itsforeign subsidiaries maintain their accounts in conformity withgenerally accepted accounting principles of the respective
countries of domicile.
In preparing the accompanying consolidated ﬁnancial
statements, certain reclassiﬁcations have been made to theconsolidated ﬁnancial statements issued domestically in orderto present them in a form which is more familiar to readers
outside Japan.
In addition, the notes to consolidated ﬁnancial statements
include additional information which is not required undergenerally accepted accounting principles and practices inJapan. Certain reclassiﬁcations have been made to the 2007
amounts to conform with the 2008 presentation.
The ﬁnancial statements presented herein are expressed inJapanese yen and, solely for the convenience of the reader,have been translated into United States dollars at the rate of¥100.19=US$1, the approximate exchange rate on March 31,
2008. These translations should not be construed as
representations that the Japanese yen amounts actually are,have been or could be converted into U.S. dollar amounts.

2. Summary of Signiﬁcant Accounting Policies(a) Basis of Consolidation
The consolidated ﬁnancial statements include the accounts of
the Company and the signiﬁcant subsidiaries and afﬁliatedcompany accounted for by the equity method.
Investment in unconsolidated subsidiaries are stated atcost and the equity method is not applied for the valuation ofsuch investments since they are considered immaterial in theaggregate.
All signiﬁcant intercompany balances and transactions
have been eliminated in consolidation. All material unrealized
proﬁt included in assets resulting from transactions within the
Company and its consolidated subsidiaries is eliminated. The
difference between the cost of investments in subsidiaries
and afﬁliates and the equity in their net assets at dates ofacquisition is being amortized over ﬁve years.
All accounts herein have been presented on the basis of
the twelve months ended March 31, 2008 for the Company
and for consolidated domestic subsidiaries, and December
31, 2007 for all overseas consolidated subsidiaries.
Adjustments have been made for any signiﬁcantintercompany transactions which took place during the period
between the end of accounting period of the overseas
subsidiaries and that of the Company.
(b) Translation of Foreign Currencies
Balance sheets of consolidated overseas subsidiaries aretranslated into Japanese yen at the current exchange rate asof the balance sheet date except for shareholders’ equity,which is translated at the historical rate. Income statementsof consolidated overseas subsidiaries are translated into
Japanese yen at the average exchange rate for the period.
Resulting translation adjustments are shown as “Foreign
currency translation adjustments” in the “Valuation andtranslation adjustments and others” section of net assets.

(c) Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid
investments, generally with original maturities of three months
or less, that are readily convertible to cash.
(d) Inventories
Inventories are stated principally at cost. Cost is determinedprincipally by the average method for the medical,
pharmaceutical and glass and materials segment, except for
certain inventories determined by the ﬁrst-in, ﬁrst-out method.
(e) Depreciation
Depreciation of property, plant and equipment of the Company
and its domestic subsidiaries is computed principally by the
declining-balance method. The straight-line method is applied
to buildings acquired by the domestic companies after April 1,
1998, and is principally applied to the property, plant andequipment of overseas subsidiaries.
The range of useful lives is principally from 31 to 50 years forbuildings and from 7 to 12 years for machinery and equipment.
(Change in accounting policy)
Pursuant to the amendment to the Japanese Corporate Tax
Law, effective from the ﬁscal year ended March 31, 2008, theCompany and its consolidated domestic subsidiaries changed
the method of depreciation for tangible ﬁxed assets acquiredon or after April 1, 2007 to that based on the revised law. As aresult of this change, gross proﬁt decreased ¥431 million(US$4,302 thousand), operating income decreased ¥510
million (US$5,090 thousand), income before income taxes
and minority interests decreased ¥537 million (US$5,360
thousand) compared with the computation by the previous
method. The effects of this change in speciﬁc segments aredescribed in the Segment Information section (Note 13).

34

(Supplemental information)
Pursuant to the amendment to the Japanese Corporate Tax
Law, effective from the ﬁscal year ended March 31, 2008, theCompany and its consolidated domestic subsidiaries
depreciate the difference between 5% of acquisition cost of
tangible ﬁxed assets acquired on or before March 31, 2007
and the memorandum value of 1 yen by the straight-line
method over 5 years commencing from the ﬁscal year
following the year in which the carrying amount of the asset
reaches 5% of the acquisition cost. The depreciated amounts
are included in depreciation expenses in cost of sales andselling, general and administrative expenses. As a result of thischange, gross proﬁt decreased ¥278 million (US$2,775
thousand), and operating income and income before income
taxes and minority interests decreased ¥320 million (US$3,194
thousand) compared with the computation by the previous
method. The effects of this change in speciﬁc segments aredescribed in the Segment Information section (Note 13).
(f) Investment Securities
Investment securities are classiﬁed and accounted for,depending on management’s intent, as follows:i ) held-to-maturity securities, which are expected to be held
to maturity with the positive intent and ability to hold tomaturity are reported at amortized cost; andii ) available-for-sale securities, which are not classiﬁed as theaforementioned securities, are reported at fair value.
Unrealized gain and loss, net of applicable tax, reported in
the “Valuation and translation adjustments and others”
section of net assets.
For year ended March 31, 2008, there was noheld-to-maturity securities held by the Company and its
consolidated subsidiaries.
Non-marketable securities are stated at cost determinedby the average method.
For other than temporary declines in fair value, investment
securities are reduced to net realizable value by a charge toincome.

(g) Leases
In accordance with Japanese accounting standards forleases, ﬁnance leases of the Company and its domestic
subsidiaries, except for those where the legal title of theunderlying property is transferred to the lessee at the end of
the lease term, are accounted for as operating leases. The
pro forma information of such leased properties on a “as if
capitalized” basis is presented in Note 8. “Leases”.
(h) Income Taxes
The provision for income taxes is computed based on income
for ﬁnancial statement purpose. The asset and liability
approach is used to recognize deferred tax assets andliabilities for the expected future tax consequences of
temporary differences between the carrying amounts ofassets and liabilities for ﬁnancial reporting purposes and theamounts used for income tax purposes.
(i ) Amounts per Common Share
Basic earnings per share is computed by dividing net income
available to common shareholders by the weighted-average
number of common shares outstanding for the period,
retroactively adjusted for stock splits.Diluted earnings per
share reﬂects the potential dilution that could occur if
securities were exercised or converted into common stock.
Diluted earnings per share of common stock assumes fullconversion of the outstanding convertible notes and bonds atthe beginning of the year (or at the time of issuance) with anapplicable adjustment for related interest expense, net of tax,
and full exercise of outstanding warrants. For the year ended
March 31, 2008, there was no common stock equivalentsthat have a dilutive effect.
Cash dividends per share presented in the accompanying
consolidated statements of income are dividends applicableto the respective years including dividends to be paid after
the end of the period. Appropriation of retained earnings at
each year-end are reﬂected in the ﬁnancial statements for thefollowing year upon shareholders’ approval.

3. Inventories
Inventories consisted of the following:Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Finished goods and merchandises ............................... . . . . . . . . . . . . . . . . . ¥Raw materials ........... ......................................................... . . . . . . . . . . . . . . . .
Work in process ............................................................... . . . . . . . . . . . . . . . . .
Packing and other ........................................................... . . . . . . . . . . . . . . . . .
Total ................... ........................................................ . . . . . . . . . . . . . . . . . ¥35

34,120
7,224
4,810
1,923
48,077

2007¥¥

28,752
5,815
3,675
1,971
40,213

2008$$

340,553
72,10348,00919,193479,858

4. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local taxes based on income which, in aggregate,
resulted in a normal statutory tax rate of approximately 40.5% for the years ended March 31, 2008 and 2007.
The signiﬁcant components of deferred tax assets and liabilities were as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Deferred tax assets
Operating loss carryforwards for tax purposes . . . . . . . . . . . . . . . . . .
Intercompany proﬁts ................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for bonuses to employees ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for loss on clearance of business . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable ................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on impairment of ﬁxed assets ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess of allowance for doubtful accounts over tax allowable amounts . . .
Accrued pension and severance liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued enterprise taxes ........................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other .. .......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross deferred tax assets ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Valuation allowance............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets .............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities
Unrealized gain on available-for-sale securities . . . . . . . . . . . . . . . . .
Other .. .......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax liabilities ........................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax assets (liabilities) .................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥
¥
¥
¥
¥

2007

3,180
987
621
792
196
847
1,176
838
171
928
9,736
(3,484)
6,252¥

12,941
83
13,024(6,772)

¥

2008

2,467
718
592
792
203
848
1,106
1,010
619
359
8,714
(2,545)
6,169$

20,40387¥ 20,490¥ (14,321)

$

¥
¥

$
$

$
$

31,740
9,851
6,198
7,905
1,956
8,454
11,738
8,364
1,707
9,262
97,175(34,774)
62,401
129,165828
129,993(67,592)

Reconciliation of the differences between the statutory tax rates and the effective income tax rates was as follows:

Statutory tax rate ............................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses not deductible for tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-taxable dividend income ..................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss in subsidiaries ....................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits primarily for research and development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in loss (proﬁt) of an afﬁliated company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other ....... ......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .
Effective income tax rate .................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2008

2007

40.5%
2.9
(1.4)
10.9
(5.1)
(0.1)
(1.8)
45.9%

40.5%
2.3
(0.6)
4.6
(2.0)
1.9
2.1
48.8%

5. Pledged Assets
The following assets were pledged as collateral:Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Land ............ .......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Buildings and structures ................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes receivable ................................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total ............................................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥

3,330
6,322
2,370
12,022

2007
¥

¥

3,362
6,435
3,938
13,735

2008$$

33,237
63,10023,655
119,992

36

The above assets were pledged against the following liabilities:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Short term bank loans ...................................................... . . . . . . . . . . . . . . . .

¥Current portion of long-term debt .................................. . . . . . . . . . . . . . . . .
Long-term debt ........ ......................................................... . . . . . . . . . . . . . . . .
Total ........................................................................... . . . . . . . . . . . . . . . . . ¥

2007

3,290
965
1,311
5,566

2008

4,885
939
2,251
8,075

¥

¥

$

32,838
9,632
13,08555,555$

6. Loss on Impairment of Fixed Assets
In the year ended March 31, 2007, the Company and its consolidated subsidiaries recorded the impairment loss of ¥1,287 million
as follows:
2007
Use

Type of asset

Impairment loss
Millions of yen

Location

Leased Assets
Land
Osaka Pref.
Store
Buildings and structures, and Machinery and equipment
Hyogo Pref.
Total .......................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The ﬁxed assets of the Company and its consolidated
subsidiaries are categorized principally into the groups ofassets for business use, leased assets, idle assets, andassets for common use. The assets for business use are
divided into groups on which separate ﬁnancial information isreported for management accounting purposes and individualstore, whereas leased assets and idle assets are categorizedindividually. Headquarters assets, R&D facilities, dormitories
and company-offered houses are categorized into assets forcommon use, since these assets can not generate identiﬁable
cash ﬂows.
The carrying amounts of asset groups whose land hadsigniﬁcantly depreciated, or which incurred consecutive

¥
¥

1,272
15
1,287

operating losses, were reduced to recoverable amounts, andsuch deducted amounts were recorded as loss on impairmentof ﬁxed assets. The loss on impairment of ﬁxed assets
consisted of a loss on buildings and structures of ¥14 million,
on machinery and equipment of ¥1 million, and on land of¥1,272 million.
The recoverable amount of such asset groups wasmeasured by their net realizable value. Relevant assets were
evaluated based on the real estate appraisal standards or on
the price of the land fronting major roads for the immaterial
assets. The asset groups which were difﬁcult to sell or which
could not be used for other purpose, however, were
evaluated as a memorandum value.

7. Investment securities
Investment securities as of March 31, 2008 and 2007 consisted of the followings:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Non-current:
Marketable:
Marketable equity securities .................................. . . . . . . . . . . . . . . . .
Investment trust funds and other ......................... . . . . . . . . . . . . . . . . .
Sub total ........... ......................................................... . . . . . . . . . . . . . . . .
Non-marketable securities ......................................... . . . . . . . . . . . . . . . . .
Total ................... ........................................................ . . . . . . . . . . . . . . . . .

37

¥
¥
¥
¥

55,28559
55,344
1,184
56,528

2007

¥
¥
¥
¥

72,66581
72,746
1,176
73,922

2008

$
$
$
$

551,802588
552,390
11,818564,208

The carrying amounts and aggregate fair values of marketable securities for investments as of March 31, 2008 and 2007 were as follows:
Millions of yen

2008
Available-for-sale securities
Equity securities .............................................. . . . . . . . . ¥Debt securities and other ............................... . . . . . . .
Total ..... ......................................................... . . . . . . . . ¥Cost

Unrealized gain

Unrealized loss

24,27360
24,333¥¥¥31,303—31,303

Fair Value

291
1
292

¥

¥
¥

55,28559
55,344

Thousands of U.S. dollars (Note 1)

2008
Cost

Available-for-sale securities
Equity securities .............................................. . . . . . . . . $ 242,270
Debt securities and other ............................... . . . . . . .
598
Total ..... ......................................................... . . . . . . . . $ 242,868

Unrealized gain

Unrealized loss

$ 312,436—$ 312,436$

Fair Value

2,904
10
2,914

$

$ 551,802
588$ 552,390

Millions of yen

2007
Available-for-sale securities
Equity securities .............................................. . . . . . . . . ¥Debt securities and other ............................... . . . . . . .
Total ..... ......................................................... . . . . . . . . ¥Cost

Unrealized gain

Unrealized loss

23,267
61
23,328¥¥¥49,42820
49,448Fair Value

30
—
30

¥

¥
¥

72,66581
72,746

Proceeds from sales of securities and gross realized gain or loss on those sales for the years ended March 31, 2008 and 2007
were as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Proceeds .............................................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Gain (loss) on sales .............................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007
—
—

¥

24
(4)

2008
$

—
—

8. Leases
The pro forma information of leased assets under ﬁnance leases that do not transfer ownership of the leased property to thelessee on an “as if capitalized” basis as of March 31, 2008 and 2007 was follows:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Acquisition cost .................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Accumulated depreciation ................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net leased property ............................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥

2007

2,695
1,884
811

¥
¥

3,895
2,570
1,325

Payments due within one year ......................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Payments due after one year ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total ............................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥

525
657
1,182

$

2007
¥
¥

26,89918,804
8,095

Thousands of U.S. dollars (Note 1)

Millions of yen

2008

2008
$

523
631
1,154

2008
$
$

5,240
6,558
11,798

Lease payments under such leases for the years ended March 31, 2008 and 2007 were ¥606 million (US$6,049 thousand) and¥586 million, respectively.

38

9. Short-Term Loans and Long-Term Debt
Short-term loans comprised overdrafts and promissory notes.
The weighted-average interest rate of short-term bank loans for the years ended March 31, 2008 and 2007 was 1.402% and1.211%, respectively.
Long-term debt comprised the following:Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Zero coupon convertible bonds due 2023 .................. . . . . . . . . . . . . . . . .

¥ 14,000
3.2% unsecured bonds due 2008 ................................. . . . . . . . . . . . . . . . .
10,000
1.42% unsecured bonds due 2011 .............................. . . . . . . . . . . . . . . . . .
10,0001.07% unsecured bonds due 2010 ............................. . . . . . . . . . . . . . . . . .
3,000
1.18% unsecured bonds due 2009 ............................. . . . . . . . . . . . . . . . . .
3,000
1.18% unsecured bonds due 2009 ............................. . . . . . . . . . . . . . . . . .
5,000
1.37% unsecured bonds due 2013 ............................. . . . . . . . . . . . . . . . . .
10,0002.04% unsecured bonds due 2018 ............................. . . . . . . . . . . . . . . . . .
10,0000.67% unsecured bonds due 2008 ............................. . . . . . . . . . . . . . . . . .
10
0.72% unsecured bonds due 2008 ............................. . . . . . . . . . . . . . . . . .
100
1.28% unsecured bonds due 2009 ............................. . . . . . . . . . . . . . . . . .
100
0.7% unsecured bonds due 2010 ................................. . . . . . . . . . . . . . . . .
40
0.95% unsecured bonds due 2010 ............................. . . . . . . . . . . . . . . . . .
100
0.79% unsecured bonds due 2010 ............................. . . . . . . . . . . . . . . . . .
50
1.55% unsecured bonds due 2011 ............................. . . . . . . . . . . . . . . . . .
50
Long-term bank loans due through 2019, with weighted-averageinterest rate of 1.435% for the year ended March 31, 2008, andof 1.218% for the year ended March 31, 2007. .............. . . . . . . . . . . . . . . . . .
71,419(30,164)
Less current portion of long-term debt ........................ . . . . . . . . . . . . . . . . .
Total ........................................................................... . . . . . . . . . . . . . . . . . ¥ 106,705
In June 1998, the Company issued ¥10,000 million(US$99,810 thousand) of 3.2% unsecured bonds due 2008.
In March 2003, the Company issued ¥3,000 million(US$29,943 thousand) of 1.07% privately-placed bonds due
2010.
In July 2003, the Company issued ¥14,000 million(US$139,735 thousand) of zero coupon convertible bondsdue 2023.
In July 2003, Zensei Pharmaceutical Industries Co., Ltd.
issued ¥100 million (US$998 thousand) of 0.72%
privately-placed bonds due 2008.
In September 2003, Nipro Genepha Corporation issued¥100 million (US$998 thousand) of 0.67% privately-placedbonds to be serially redeemed by 2008.
In July 2004, the Company issued ¥3,000 million (US$29,943
thousand) of 1.18% privately-placed bonds due 2009.
In July 2004, Zensei Pharmaceutical Industries Co., Ltd.
issued ¥100 million (US$998 thousand) of 1.28%
privately-placed bonds due 2009.
In January 2005, Zensei Pharmaceutical Industries Co., Ltd.

39

2008

2007
¥

14,00010,00010,000
3,000
3,000
5,000
—
—
30
100
100
60
100
70
50

62,011(23,305)¥ 84,216$

139,735
99,81099,81029,94329,94349,905
99,81099,810
100
998
998
400
998
499
499

712,836(301,068)$ 1,065,026

issued ¥100 million (US$998 thousand) of 0.7%
privately-placed bonds to be serially redeemed by 2010.
In August 2005, Zensei Pharmaceutical Industries Co., Ltd.
issued ¥100 million (US$998 thousand) of 0.95%
privetely-placed bonds due 2010.
In August 2005, Zensei Pharmaceutical Industries Co., Ltd.
issued ¥100 million (US$998 thousand) of 0.79%
privately-placed bonds to be serially redeemed by 2010.
In March 2006, the Company issued ¥10,000 million(US$99,810 thousand) of 1.42% unsecured bonds due 2011.
In March 2006, the Company issued ¥5,000 mllion(US$49,905 thousand) of 1.18% privately-placed bonds due
2009.
In March 2006, Zensei Pharmaceutical Industries Co., Ltd.
issued ¥50 million (US$499 thousand) of 1.55%
privately-placed bonds due 2011.
In March 2008, the Company issued ¥10,000 million(US$99,810 thousand) of 1.37% unsecured bonds due 2013.
In March 2008, the Company issued ¥10,000 million(US$99,810 thousand) of 2.04% unsecured bonds due 2018.

The aggregate annual maturities of long-term debt outstanding at March 31, 2008 are as follows:2008 ............. ......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 ............. ......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 ............. ......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 and thereafter ............................................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total ............................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As is customary in Japan, long-term and short-term bankloans are made under general agreements which provide that
additional securities and guarantees for present and futureindebtedness will be given under certain circumstances at therequest of the bank, and that any collateral so furnished will beapplicable to all indebtedness due to the bank.

Millions of yen

Thousands of U.S. dollars (Note 1)

2008

2008

¥

30,164
20,68021,75364,272¥ 136,869$

301,068
206,408
217,117641,501$ 1,366,094

In addition, the agreements provide that the bank has theright to offset cash deposits against any long-term andshort-term bank loan that becomes due, and in case of default
and certain other speciﬁed events, against all other loans
payable to the bank. Such rights have never been exercised bybanks against the Company or its consolidated subsidiaries.

10. Accrued Pension and Severance Liabilities
The Company and certain consolidated subsidiaries have deﬁned beneﬁt pension plans and unfunded retirement beneﬁt plans for
employees. The following table sets forth the changes in projected beneﬁt obligation, plan assets and funded status of theCompany and its consolidated subsidiaries at March 31, 2008 and 2007.
Thousands of U.S. dollars (Note 1)

Millions of yen

20081) Projected beneﬁt obligation ......................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2) Fair value of plan assets ............................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3) Projected beneﬁt obligation in excess of plan assets 1)+2) . . . . .
4) Unrecognized actuarial gain ........................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5) Unrecognized past service obligation ......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6) Total 3)+4)+5) ................................................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7) Prepaid pension cost .................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8) Accrued pension and severance liabilities 6)-7) . . . . . . . . . . . . . . . . . . . . ¥2007(8,876)
6,992(1,884)(173)(21)(2,078)50(2,128)¥¥(7,750)6,539(1,211)(1,354)—(2,565)—(2,565)

2008$$(88,592)
69,788(18,804)(1,727)(210)(20,741)499(21,240)

The breakdown of net pension and severance costs for the years ended March 31, 2008 and 2007 were as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Service cost ......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Interest cost ......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets ....................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of actuarial gain ............................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of past service obligation ........... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other ...................................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net pension and severance costs ................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥

2007

586
208
(124)
(262)
(3)
69
474

¥

¥

586
204
(99)
(166)
—
—
525

2008
$

$

5,849
2,076
(1,238)(2,615)
(30)
689
4,731

The assumptions used in the accounting for the above beneﬁt plans were as follows:

Discount rate ....................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected rate of return on plan assets ........... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization period of past service obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization period of actuarial differences ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2008

2007

Primarily 2.5%
Primarily 1.5%
Primarily 5 years
Primarily 5 years

Primarily 2.5%
1.5%—
5 years40

11. Commitments and Contingent Liabilities
The Company and its consolidated subsidiaries had the following commitments and contingent liabilities:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Liabilities for guarantees .................................................. . . . . . . . . . . . . . . . . ¥Export drafts discounted ................................................. . . . . . . . . . . . . . . . .
Trade notes receivable discounted ............................... . . . . . . . . . . . . . . . . .
Total ............................................................................. . . . . . . . . . . . . . . . . ¥

549
18
199
766

2007
¥

¥

1,094
24
63
1,181

2008
$

$

5,480
180
1,986
7,646

12. Net Assets
The signiﬁcant provisions in the Corporate Law of Japan (the“Corporate Law”) that affect ﬁnancial and accounting matters
are summarized below:(a) Dividends
Under the Corporate Law, companies can pay dividends at
any time during the ﬁscal year in addition to the year-end
dividend upon resolution at the shareholders meeting. For
companies that meet certain criteria such as (1) having theboard of directors, (2) having independent auditors, (3) having
the board of corporate auditors, and (4) the service period of
the directors is prescribed as one year rather than the normal
term of two years by its articles of incorporation, the board of
directors may declare dividends (except for dividends in kind)
if the company has prescribed so in its articles ofincorporation. The Company’s present system meets the ﬁrst
three criteria but the two-year service period of the directors
does not meet the fourth criterion.
Interim dividends may also be paid once a year by the
resolution of the board of directors if the articles ofincorporation of the company stipulate so. The Company’s
articles of incorporation contain such a stipulation, and it
pays interim dividend semi-annually by the resolution of theBoard of Directors.
The Corporate Law provides certain limitations on theamounts available for dividends or the purchase of treasury
stock.

(b) Increases / decreases and transfer of common stock,reserve and surplus
The Corporate Law requires that an amount equal to 10% of
dividends must be appropriated as a legal reserve (acomponent of retained earnings) or as additional paid-in
capital (a component of capital surplus) depending on theequity account charged upon the payment of such dividends
until the total of aggregate amount of legal reserve andadditional paid-in capital equals 25% of the common stock.
Under the Corporate Law, the total amount of additional paid-in
capital and legal reserve may be reversed without limitation.
The Corporate Law also provides that common stock,legal reserve, additional paid-in capital, other capital surplus
and retained earnings can be transferred among the accounts
under certain conditions by the resolution of the shareholders.
The Company’s legal reserve, which is included in retained
earnings, amounted to ¥1,196 million (US$11,937 thousand)as of March 31, 2008, and its additional paid-in capital, whichis included in capital surplus, amounted to ¥29,972 million(US$ 299,152 thousand) as of March 31, 2008.
The accompanying consolidated ﬁnancial statements do
not reﬂect the appropriation of retained earnings, including
the year-end dividend of ¥9.50 (US$0.09) per share,
aggregating ¥603 million (US$6,019 thousand), which was
subsequently approved by the Shareholders’ Meeting heldon June 26, 2008.

13. Segment Reporting
The Company and its consolidated subsidiaries are primarily
engaged in the business consisting of three major segments:
Medical Equipment, Pharmaceutical and Glass and Materials.
The Company is organized into business segments based on
the market nature of products.
The Store segment was removed from business segment
as a result of divestiture of subsidiaries Nissho Corporation
and Nissho Drug Co., Ltd. in 2006.
The Medical Equipment segment manufactures and sells
disposable medical equipment. The medical equipment soldincludes dialyzers, dialysis-related devices, andinjection-related products.

41

The Pharmaceutical segment manufactures and sells a
range of pharmaceutical products and devices, such asprescribed specialized and diagnostic products for hospitaluse, and medical equipment incorporating solutions anddrugs, such as pre-ﬁlled syringes and infusion kits.
The Glass and Materials segment sells internal glass
sections for vacuum ﬂasks, glass tubes for ampoule and vial
production, glass tube vials and other glass products.
The sales of “Other” include the sales of machinery for
manufacture of medical equipment and real estate rental
income.

Business segment information for the years ended March 31, 2008 and 2007 was as follows:
Millions of yen

2008
MedicalEquipment

Glass &
Materials

Pharmaceutical

Net sales:
Outside .... ............................... ¥ 111,084
Intersegment .........................
—
Total ........................................
111,084
Operating expenses .................
95,254
Operating income ..................... ¥ 15,830
Identiﬁable assets ...................... ¥ 133,581
Depreciation and amortization ...
7,057
Capital expenditures .................
16,419¥¥¥48,754—48,75445,483
3,271
93,143
6,613
8,352

¥

¥
¥

11,437
3,166
14,603
12,713
1,890
12,326
471
386

Other

¥

¥
¥

Eliminations/
Corporate

Consolidated—(3,241)(3,241)
4,086¥ (7,327)¥ 104,551
833
684¥ 172,113—
172,113
158,436¥ 13,677¥ 349,302
15,05425,900Total

Eliminations/
Corporate

Consolidated$1,717,866
32,3481,750,214
1,540,572$ 209,642$2,442,869
141,941
251,683—$ (32,348)(32,348)
40,783$ (73,131)$1,043,527
8,314
6,827

$ 1,717,866—
1,717,866
1,581,355$ 136,511$ 3,486,396
150,255
258,510Total¥ 172,113
3,241
175,354
154,350¥ 21,004¥ 244,751
14,221
25,216

838
75
913
900
13
5,701
80
59

¥

Thousands of U.S. dollars (Note 1)

2008
MedicalEquipment

Pharmaceutical

Glass &
Materials

Net sales:
Outside .... ............................... $1,108,734
Intersegment .........................
—
Total ........................................ 1,108,734
Operating expenses .................
950,734
Operating income ..................... $ 158,000
Identiﬁable assets ...................... $1,333,277
Depreciation and amortization ...
70,436
Capital expenditures .................
163,879$ 486,615—
486,615453,967$ 32,648$ 929,664
66,00583,362$ 114,153
31,600145,753
126,889$ 18,864$ 123,026
4,701
3,853

Other

$

$
$

8,364
748
9,112
8,982
130
56,902
799
589

Millions of yen

2007
MedicalEquipment

Pharmaceutical

Net sales:
Outside .... ............................... ¥ 97,300 ¥Intersegment .........................
4
Total ........................................
97,304
Operating expenses .................
82,970Operating income ..................... ¥ 14,334 ¥Identiﬁable assets ...................... ¥ 114,946 ¥Depreciation and amortization ...
5,327
Loss on impairment of ﬁxed assets ....
—
Capital expenditures .................
11,06542,152 ¥—42,15238,854
3,298 ¥
80,342 ¥
5,496
—
9,490

Glass &
Materials

12,919 ¥3,445
16,364
14,4991,865 ¥
12,482 ¥
534
—
167

Store

30,973 ¥—30,97330,703
270 ¥
— ¥
383
15
58

Other

Total

Eliminations/
Corporate

Consolidated— ¥ 184,363
1,019 ¥ 184,363—
3,669 ¥ (3,669)
220(3,669)184,363
188,032
1,239
171,310
3,196
168,1141,088
151 ¥ 19,918 ¥ (6,865) ¥ 13,053
6,009 ¥ 213,779 ¥ 122,881 ¥ 336,660
12,470641
11,829
89
1,287
—
1,287
1,272
23,093
2,227
20,86686Note:(1) Operating expenses of “Eliminations/Corporate” for the years ended March 31, 2008 and 2007 included unallocated corporate costs of ¥7,327 million (US$73,131
thousand) and ¥6,865 million, respectively. The unallocated corporate costs consisted primarily of research and development costs and headquarters administration costs.
(2) Assets of “Eliminations/Corporate” at March 31, 2008 and 2007 included ¥104,741 million (US$1,045,424 thousand) and ¥122,931 million of corporate assets, respectively,
consisting primarily of cash and cash equivalents, investments securities, research and development-related equipment and headquarters administration-related assets.
(3) Pursuant to the amendment to the Japanese Corporate Tax Law, effective from the ﬁscal year ended March 31, 2008, the Company and its consolidated domestic
subsidiaries changed the method of depreciation for tangible ﬁxed assets acquired on or after April 1, 2007 to that based on the revised law. As a result of this change,
operating expenses in the Medical Equipment, Pharmaceutical and Glass & Materials segments and “Eliminations/Corporate” increased ¥225 million (US$2,246
thousand), ¥228 million (US$2,275 thousand), ¥12 million (US$120 thousand) and ¥45 million (US$449 thousand), respectively, while operating income in those segments
decreased by the same amounts, compared with the computation by the previous method.
(4) Pursuant to the amendment to the Japanese Corporate Tax Law, effective from the ﬁscal year ended March 31, 2008, the Company and its consolidated domestic
subsidiaries depreciate the difference between 5% of acquisition cost of tangible ﬁxed assets acquired on or before March 31, 2007 and the memorandum value of 1 yen
by the straight-line method over 5 years commencing from the ﬁscal year following the year in which the carrying amount of the asset reaches 5% of the acquisition cost.
The depreciated amounts are included in depreciation expenses in cost of sales and selling, general and administrative expenses. As a result of this change, operating
expenses in the Medical Equipment, Pharmaceutical and Glass & Materials segments and “Eliminations/Corporate” increased ¥113 million (US$1,128 thousand), ¥147
million (US$1,467 thousand), ¥39 million (US$389 thousand) and ¥21 million (US$210 thousand), respectively, while operating income in those segments decreased by
the same amounts, compared with the computation by the previous method.

42

The information by geographic area for the years ended March 31, 2008 and 2007 was as follows:
Millions of yen

2008
Japan

Net sales:
Outside ................................... ¥Intersegment .........................
Total ........................................
Operating expenses..................
Operating income (loss) ........... ¥Identiﬁable assets ...................... ¥135,60926,416
162,025
139,984
22,041
241,544

America¥¥¥

20,9091,137
22,04623,712(1,666)
8,661

Europe¥¥¥Eliminations/
Corporate

Asia

9,174
9
9,183
8,974
209
4,565

¥

¥
¥

6,421
13,955
20,376
19,424
952
9,585

¥

¥
¥

—
(41,517)(41,517)(33,658)(7,859)84,947

Consolidated¥ 172,113—
172,113
158,436
13,677¥¥ 349,302

Thousands of U.S. dollars (Note 1)

2008
Japan

Net sales:
Outside ................................... $ 1,353,518
263,659
Intersegment .........................
Total ........................................ 1,617,177
Operating expenses.................. 1,397,185
Operating income (loss) ........... $ 219,992
Identiﬁable assets ...................... $ 2,410,859

America$ 208,694
11,348220,042
236,670$ (16,628)$
86,446

Asia

Eliminations/
Corporate

Consolidated

64,088139,285
203,373
193,872$
9,501$
95,668—$ (414,382)(414,382)(335,942)$ (78,440)$ 847,859$ 1,717,866—
1,717,866
1,581,355$ 136,511$ 3,486,396

Eliminations/
Corporate

Consolidated—(36,876)(36,876)(29,884)(6,992)¥¥ 105,932¥ 184,363—
184,363
171,310¥
13,053¥ 336,660

Europe$$$91,56690
91,65689,5702,086
45,564$

Millions of yen

2007
Japan

Net sales:
Outside ................................... ¥Intersegment .........................
Total ........................................
Operating expenses ..................
Operating income (loss) ........... ¥Identiﬁable assets ...................... ¥156,043
23,611
179,654
159,255
20,399214,819

America¥¥¥

17,382805
18,187
19,133(946)
6,427

Europe

¥

¥
¥

7,102
86
7,188
7,050
138
3,112

Asia

¥

¥
¥

3,836
12,374
16,21015,756
454
6,370

¥

Note:
(1) Operating expenses of “Eliminations/Corporate” for the years ended March 31, 2008 and 2007 included unallocated corporate costs of ¥7,327 million(US$73,131 thousand) and ¥6,865 million, respectively. The unallocated corporate costs consisted primarily of research and development costs and headquarters
administration costs.
(2) Assets of “Eliminations/Corporate” at March 31, 2008 and 2007 included ¥104,741 million (US$1,045,424 thousand) and ¥122,931 million of corporate assets,
respectively, consisting primarily of cash and cash equivalents, investments securities, research and development-related equipment and headquarters
administration-related assets.
(3) The main countries of each geographic area were:
America : The United States of America and Brazil
Europe : Belgium
Asia: China, Thailand and Singapore(4) Pursuant to the amendment to the Japanese Corporate Tax Law, effective from the ﬁscal year ended March 31, 2008, the Company and its consolidated
domestic subsidiaries changed the method of depreciation for tangible ﬁxed assets acquired on or after April 1, 2007 to that based on the revised law. As a resultof this change, operating expenses in the Japan segment and “Eliminations/Corporate” increased ¥465 million (US$4,641 thousand) and ¥45 million (US$449
thousand), respectively, while operating income in those segments decreased by the same amounts, compared with the computation by the previous method.
(5) Pursuant to the amendment to the Japanese Corporate Tax Law, effective from the ﬁscal year ended March 31, 2008, the Company and its consolidated domestic
subsidiaries depreciate the difference between 5% of acquisition cost of tangible ﬁxed assets acquired on or before March 31, 2007 and the memorandum valueof 1 yen by the straight-line method over 5 years commencing from the ﬁscal year following the year in which the carrying amount of the asset reaches 5% of theacquisition cost. The depreciated amounts are included in depreciation expenses in cost of sales and selling, general and administrative expenses. As a result of
this change, operating expenses in the Japan segment and “Eliminations/Corporate” increased ¥299 million (US$2,984 thousand) and ¥21 million (US$210
thousand), respectively, while operating income in those segments decreased by the same amounts, compared with the computation by the previous method.

43

Sales to foreign customers were as follows:
Millions of yen

2008
America

Europe

2007
Asia

Total

Export sales and sales byoverseas subsidiaries ........... ¥ 35,688 ¥ 19,140 ¥ 10,284 ¥ 65,112
Percentage of such sales against
20.7%
11.1%
6.0%
37.8%
consolidated net sales .............

America

Europe

Asia

Total

¥ 31,899¥ 15,071¥ 7,568¥ 54,538

17.3%

8.2%

4.1%

29.6%

Thousands of U.S. dollars (Note 1)

2008
America

Europe

Asia

Total

Export sales and sales byoverseas subsidiaries ........... $ 356,203 $ 191,037 $102,645 $ 649,885
Percentage of such sales against
20.7%
11.1%
6.0%
37.8%
consolidated net sales .............

14. Selling, General and Administrative Expenses
Signiﬁcant components of selling, general and administrative expenses for the years ended March 31, 2008 and 2007 were as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Salaries ........ ......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Freight charges ................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

8,976
3,952

¥

10,953
3,497

2008
$

89,59039,445

15. Research and Development Expenses
Research and development expenses for the years ended March 31, 2008 and 2007 were ¥6,194 million (US$61,823 thousand) and¥4,461 million, respectively.

16. Supplemental Disclosures of Cash Flow Information
Supplemental information related to the Consolidated Statements of Cash Flows was as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen

2008
Cash paid during the year for :Interest ............................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Income tax ....................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,889
10,137

2007
¥

1,698
5,320

2008
$

18,854
101,178

44

Report of Independent Certiﬁed Public Accountantson The Consolidated Financial Statements

To the Board of Directorsof Nipro Corporation

We have audited the accompanying consolidated balance sheets of Nipro Corporation and its Consolidated
Subsidiaries as of March 31, 2008 and 2007, and the related consolidated statements of income, shareholders’equity, and cash ﬂows for the years then ended, all expressed in Japanese yen. These consolidated ﬁnancial
statements are the responsibility of Niporo Corporation’s management. Our responsibility is to express an
opinion on these consolidated ﬁnancial statements based on our audits.
We conducted our audits in accordance with auditing standards, procedures and practices generally
accepted and applied in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the ﬁnancial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the ﬁnancial
statements. An audit also includes assessing the accounting principles used and signiﬁcant estimates madeby management, as well as evaluating the overall ﬁnancial statement presentation.We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated ﬁnancial statements referred to above present fairly, in all material respects,
the consolidated ﬁnancial position of Nipro Corporation and its Consolidated Subsidiaries as of March 31, 2008
and 2007 and the consolidated results of their operations and their cash ﬂows for the years then ended inconformity with accounting principles and practices generally accepted in Japan.

Osaka, Japan
June 28, 2008
Tomei Audit Corporation

45

Corporate Information (As of March 31, 2008)

Date of Establishment

Common Stock

July 8, 1954

Authorized
IssuedOutstanding
Number of Shareholders

Head Ofﬁce
3-9-3 Honjo-nishi, Kita-ku, Osaka 531-8510, Japan
Telephone : +81-6-6372-2331
Facsimile : +81-6-6375-0669
http://www.nipro.co.jp/english/

200,000,000 shares
63,878,505 shares
63,463,468 shares
12,650Stock Listings
Tokyo Stock Exchange, Osaka Securities Exchange
Ticker Code: 8086

Tokyo Ofﬁce

Transfer Agent

4-3-4 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan
Telephone : +81-3-5684-5611
Facsimile : +81-3-5684-5610

Mizuho Trust & Banking Co., Ltd., Osaka Branch,
Stock Transfer Agency Dpt.
2-11-16 Sonezaki, Kita-ku, Osaka 530-0057, Japan

Number of Employees
Parent Company ................................................... . . . . . . . . . . . . 2,080
Consolidated subsidiaries ..................................... . . . . . . . . . . . . 6,940
Total ....................................................................... . . . . . . . . . . . . 9,020

Stock Price Range (Tokyo Stock Exchange)

Principal Shareholders
Number of Shares Held Percentage of Total(in thousands)
Shares in Issue (%)

(Yen)
3,000

Sanri Kosan Co., Ltd.............................. 12,920

20.22

2,800

Japan Trustee Services Bank, Ltd..........

4,884

7.65

2,600

The Master Trust Bank of Japan, Ltd.....

2,770

4.34

2,400

Trust & Custody Services Bank, Ltd. .....

2,129

3.33

2,200

Minoru Sano .. ........................................

1,993

3.12

2,000

Resona Bank, Ltd. .................................

1,380

2.16

1,800

Mizuho Corporate Bank, Ltd. .................

783

1.23

1,600

State Street Bank and Trust Company 505019 ....

757

1.18

1,400

Morgan Stanley and Company Inc. ........

738

1.15

1,200

Bank of New York, Tax Treaty JASDEC Omnibus Two ...

643

1.01

1,000

Total .............. ........................................ 28,997

45.39

12

3

6

9

2006

12

2007

3

6

9

12

3

2008

Subsidiaries and afﬁliates (As of June 30, 2008)
Area

Country

DomesticJapan

Overseas

ThailandPhilippines
India
China
Singapore
U.A.E.
South Africa
BrazilU.S.A.
PanamaMexicoPuerto Rico
Belgium
FranceRussiaCompany
Nipro Medical Industries, Ltd.
Nipro Pharma Corporation
Nipro Genepha Corporation
Tohoku Nipro Pharmaceutical Corporation
Zensei Pharmaceutical Industries Co., Ltd.
Saitama Daiichi Pharmaceutical Co., Ltd.
Shinwa Shoji Co., Ltd.
Nissho Insurance Services Co., Ltd.
Washu Kogyo Co., Ltd.
Bipha Corporation*
Nipro (Thailand) Corporation Ltd.
Nipro Sales (Thailand) Co., Ltd.
Nipro Hospital Products, Inc.
Nipro Medical (India) Pvt Ltd.
Nipro (Shanghai) Co., Ltd.
Nipro Trading (Shanghai) Co., Ltd.
Shanghai Nissho Vacuum Flask Reﬁll Co., Ltd.
Nipro Asia Pte Ltd.
Nipro Middle East FZE
Nipro South Africa Pty Ltd.
Nipro Medical LTDA.
Nipro Industria e Comercio de Produtos Cardiopulmonares LTDA.
Nipro Medical Corporation
Nipro Diabetes Systems, Inc.
Nipro Medical Panama S.A.
Nipro Medica de Mexico, S.A. DE C.V.
Nipro Medical Puerto Rico Inc.
Nipro Europe N.V.
Nipro Biocorp S.A.
OOO Nipro Medical

Segment
Medical Equipment
PharmaceuticalPharmaceuticalPharmaceuticalPharmaceuticalPharmaceutical
Glass & Materials
Other
Other
Pharmaceutical
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Glass & Materials
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment

Principal business
Manufacturing
Manufacturing and Marketing
Manufacturing and Marketing
Manufacturing
Manufacturing and Marketing
Manufacturing and R&D
Manufacturing and Marketing
Insurance Agency
Real estate lease
R&D and Manufacturing
Manufacturing and Marketing
MarketingMarketingMarketing
Manufacturing and Marketing
MarketingMarketingMarketingMarketingMarketing
Manufacturing and Marketing
Manufacturing and Marketing
Marketing
R&D and Marketing
MarketingMarketingMarketingMarketingMarketingMarketing: Afﬁliate accounted for by the equity method*

46

NIPRO CORPORATION
3-9-3 Honjo-nishi, Kita-ku, Osaka 531-8510, Japan
Telephone: +81-6-6372-2331
Facsimile : +81-6-6375-0669
http://www.nipro.co.jp/english/

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