Consolidated Financial Statements

May 19, 2006

For the year ended March 31, 2006
Company name: NIPRO CORPORATION

Stock Exchange listed:Tokyo and Osaka
Code No:
8086
Head office location:
Osaka, Japan(URL: http://www.nipro.co.jp/)
Representative:
Minoru Sano, President and Representative Director
Contact:
Akihiko Yamabe, Director, General Manager of Accounting andCorporative Planning Division
TEL (06) 6372-2331
Date of the meeting of the Board of Directors for approval of the financial statements: May 19, 2006
Name of related company: Sanri Kosan Co., Ltd. (Code no: N/A)
Percentage of voting rights of Nipro Corporation held by related company: 20.6%
Adoption of U.S. GAAP: N/A

1.

Consolidated Results for the Year ended March 31, 2006 (From April 1, 2005 to March 31, 2006)(1) Consolidated Results of Operations
Net Sales(Note: Amounts are truncated to 1 million yen)
Operating Income
Recurring Income

Millions of yen%

Millions of yen%

Millions of yen%

206,801
192,320

7.5
1.9

12,331
10,40418.5(17.1)

12,228
8,685

40.8
(8.9)

Year ended March 31, 2006
Year ended March 31, 2005

Net Income
Millions of yen

%

4,512
4,518

(0.1)
7.2

Year ended March 31, 2006
Year ended March 31, 2005

Earnings
per Share
Yen

Diluted Earnings
per share

Ratio of Net Income
to Shareholders’EquityRatio of Recurringincome to Total
AssetsRatio of Recurring
Income to Net
Sales

Yen

%

%

%

-

4.3
4.7

3.9
3.0

5.9
4.5

69.57
69.37

Notes: 1. Equity in loss of affiliate:
Year ended March 31, 2006:(702) million yen
Year ended March 31, 2005:(741) million yen
2. The weighted average number of outstanding shares for the period (consolidated) :Year ended March 31, 2006:
63,548,846 shares Year ended March 31, 2005:
63,596,799 shares
3. Change in accounting method: Adopted
4. Percentages in the above table for Net Sales, Operating Income, Recurring Income and Net Income represent changes from the previous
fiscal year.

(2) Consolidated Financial Position
Total Assets
Year ended March 31, 2006
Year ended March 31, 2005
Note:

Shareholders’EquityMillions of yen

Millions of yen

338,740
293,748

112,390
96,700The number of outstanding shares at the end of the period (consolidated):
Year ended March 31, 2006:
63,528,916 shares

Shareholder’ Equity
per Share

Ratio of Shareholders’Equity to Total Assets
%

Yen

33.2
32.9

1,767.69
1,519.58

Year ended March 31, 2005:

63,565,537 shares

Cash and cash
equivalents(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Millions of yen

Millions of yen

Millions of yen

Millions of yen

6,701
17,375(27,555)(12,627)

15,712
7,088

49,91453,734

Year ended March 31, 2006
Year ended March 31, 2005

(4) Matters related to scope of consolidation and application of equity method
Number of consolidated subsidiaries:
Number of unconsolidated subsidiaries accounted for by the equity method:
Number of affiliate company accounted for by the equity method:

1901(5) Change of reporting entities
Number of consolidated companies
Number of companies accounted for by the equity method2.

Added:
Added:

40Removed:Removed:00Projected Consolidated Financial Results for the Year ending March 31, 2007 (From April 1, 2006 to March 31, 2007)

Net Sales

Recurring Income

Millions of yen
Six months ending Sept. 30, 2006

Millions of yen

Net Income
Millions of yen

104,000
4,800
2,250
Year ending March 31, 2007
212,000
11,4006,000(Reference) Projected earnings per share for the year ending March 31, 2007: 93.01 yen* The projections shown above are prepared based on information available as of the issuing date of this report.
The actual results may differ from the projected figures due to various factors. Concerning the matters related tothe above projections, please refer to the Page 7.

-1-

Corporate GroupOur group consists of the Reporting Company (“the Company”), its 22 subsidiaries and 1 affiliate, andis primarily engaged in manufacture and sale of medical equipment, pharmaceutical products and glassand material products as well as management of supermarkets and drugstores.
Positioning of each company in connection with the businesses of our group and the relation to thebusiness segments are as follows:<Medical Equipment Division>
Domestic:
The Company and Nipro Medical Industries, Ltd. manufacture medical equipment, andthe Company sells medical equipment manufactured by its foreign subsidiaries.
Overseas:
Nipro (Thailand) Corporation Ltd. (Thailand), Nipro (Shanghai) Co., Ltd. (China) andNipro Medical LTDA. (Brazil) purchase some of raw materials and machinery for theirproduction from the Company, manufacture medical equipment, sell through the Company
and its subsidiaries as well as locally on their own.
Nipro Europe N.V. (Belgium), Nipro Medical Corporation (U.S.A.), and Nipro Asia Pte. Ltd.
(Singapore) sell medical equipment etc. in the areas of their locations.
Nipro Diabetes Systems, Inc. (U.S.A.) develops and sells diabetes-related products suchas insulin pump.
<Pharmaceutical Division>
The Company, Nipro Pharma Corporation and Nipro Genepha Corporation manufactureand sell pharmaceutical products. Tohoku Nipro Pharmaceutical Corporation manufactures
pharmaceutical products.
Bipha Corporation, an affiliate accounted for by the equity method, is engaged inresearch and development, manufacture and sale of pharmaceutical products such as
blood products.
<Glass and Materials Division>
Domestic:
The Company sells glass tubes in the Kansai area as well as manufactures and sells
other glass products.
In the Kanto area, Shinwa Shoji Co., Ltd. purchases glass tubes as raw materials, andmanufactures and sells glass products.
Overseas:
Shanghai Nissho Vacuum Flask Refill Co., Ltd. (China) manufactures internal glass
sections of vacuum flask and other glass products, and sells locally as well as exports.
<Supermarket Division>
Nissho Corporation operates supermarkets in the Keihanshin region, selling fresh
produce, etc.
Nissho Drug Co., Ltd. carries out drugstores mainly in the Hanshin region, retailing
medicine and general grocery, etc.
<Other>
The Company manufactures (purchases, in some cases) and sells machinery for
manufacture of medical equipment, etc.
The Company and Nissho Corporation lease real estate properties.
Nissho Insurance Services Co., Ltd. operates non-life insurance agency mainly for thegroup companies.
Sanri Kosan Co., Ltd., an other related company, is engaged in leasing of real estate
properties.
The above explanations are illustrated as follows:-2-

(Domestic)(Overseas)
Medical Equipment Division

Medical Equipment Division<Manufacture and Sale>◎Nipro (Thailand) Corporation<Manufacture>

Ltd.

◎Nipro Medical Industries, Ltd.

◎Nipro (Shanghai) Co., Ltd.
◎Nipro Medical LTDA.
And 1 other subsidiary.

Pharmaceutical Division<Sale>◎Nipro Europe N.V.
◎Nipro Medical Corporation○Nipro Asia Pte. Ltd.
And 5 other subsidiaries<Manufacture and Sale>◎Nipro Pharma Corporation◎Nipro Genepha Corporation<Manufacture>◎Tohoku Nipro
Pharmaceutical Corporation
Manufacture□Bipha Corporation
Glass & Materials Division<Manufacture and Sale>◎Shinwa Shoji Co., Ltd.

<Development and Sale>

Nipro Corporation<Development,
and Sale>◎Nipro Diabetes Systems, Inc.

Glass & Materials Division<Manufacture and Sale>◎Shanghai Nissho Vacuum Flask

Supermarket Division

Refill Co., Ltd.

<Supermarket management>◎Nissho Corporation<Drugstore management>

Supply of products andmerchandises◎Nissho Drug Co., Ltd.

Supply of raw materials
Other

Other transactions<Non-life insurance agency>○Nissho Insurance Services Co.,
Ltd.

Other
<Rental of real estate>△Sanri Kosan Co., Ltd.

-3-◎

Consolidated subsidiary○

Unconsolidated subsidiary□

Affiliate accounted for by theequity method△

Other related company

Management Policies
1. Basic Policies of Management
Since our foundation, we have based ourselves on “technology” and aimed at manufacturing better
products at lower costs. We set our management philosophy in contributing to the society throughcorporate activities, especially focusing on developing new products in the fields of medicals andpharmaceuticals.
As a management structure in pursuit of compatibility between “stability” and “growth” that is mostimportant for any company, we implement the “performance-linked remuneration system” that is the ruleof profit sharing among shareholders, employees and management, and carry out active business
operations, holding the employees responsible for boosting the performance of individual businesses.

2. Basic Policies on Distribution of Profits
Our policy is that 50% of the non-consolidated net income is to be distributed to the shareholders.
Employees’ bonuses are determined according to the business performance of the division where theemployees belong, and the bonuses of the directors and the statutory auditors are determined based on
the business performance of the Company.
Retained earnings are to be invested in the sales and production facilities as well as in research anddevelopment, in view of establishing the firm management basis and long-term business developments,
so as to ensure stable profits for the future.
In terms of the payment of dividends after the enforcement of corporate law in Japan (2006/5/1), we
will pay at the end of the interim period and at the end of the fiscal year, as before.
3. Position and Policy on Reduction of Trading Unit of Stock
We consider that reduction of trading unit of stock will promote individual investors into the market
and lead to the vitalization of securities market. In view of the large amount of implementation costs etc.,
we will consider to reduce the reduction of trading unit at the occasion of transition to the company
without share certificate.

4. Target Management Indicators
Our performance targets are to achieve 300 billion yen of consolidated net sales, 20 billion yen ofrecurring income and 10% of return on equity (ratio of net income to shareholders’ equity) by the fiscal
year 2010.
As a fundamental perspective for achieving these targets, we will continuously strengthen researchand development, production capacity, and sales force to expand the business, while seeking the mutual
complement among Medical Equipment, Pharmaceutical, Glass & Materials and Supermarket divisions.
Especially as for research and development, we will progress research of cutting-edge medical
technologies, such as regenerative medicine and recombinant pharmaceutical formulations, etc. basedon a long-term view. On the other hand, for strengthening production capacity, we will utilize andexpand domestic and overseas production bases of medical equipment, and expand the production
facilities for contract manufacturing of the pharmaceutical business.

5. Medium- and Long-term Management Strategies
In the Medical Equipment division, we, as a general medical equipment manufacturer, will seek toenhance the added-value of Nipro brand and increase the market share by strengthening the sales in thefield of dialysis-related products such as dialyzers and maintaining the leading share in the market, as
well as forging ahead to the field of advanced medical technologies such as catheters and artificialorgans, reinforcing the product line-up, and conducting active sales and marketing in the overseas
markets.
In the Pharmaceutical division, we devote efforts to developments of pharmaceutical products andresearch of new formulation technologies in the fields of kidney disease, blood, and nutrition infusion. At
the same time, we will promote commercialization of kit products that integrate container, device, drug
-4-

and solution, expand sales of double-bag kits and powdered dialysate solutions, launch theinfusion-related business, focus on development of products that would hold the leading share, andexpand aggressively the business of generic products as a manufacturer.
In the Glass and Materials division, we will increase competitiveness by reducing manufacturing costsof various glass products based on our peerless glass processing technologies, conduct global sales
activities and strive to secure stable profit.
In the Supermarket division, different from manufacturing business which can create a big hit, there is
no expectation of explosive growth, but on the other hand, supermarket business is also one of theessential business to the consumer public. We will endeavor to understand varieties of consumers’
needs, focus on making our stores familiar to and loved by our customers, and expand community-based
stores.

6. Issues and Challenges that the Group Faces
In the domestic business of the Medical Equipment division, we will focus on dialysis-related products.
such as dialyzers, blood tubing sets, and dialysis machines. We will endeavor to react to the market
needs promptly, develop and market new products, improve the product quality, strengthen sales
activities and increase the market share. In the field of disposable products, we will make efforts toincrease our market share of injection and infusion-related products such as infusion sets and syringes,
as well as to develop, market and promote new products such as nutrition infusion related products.
With regard to the cardiovascular products, we will enlarge the product line-up by introducing new
products such as PTCA balloon and stent, reinforce marketing and sales forces, and increase our market
share. In addition, as for the examination-related products, we will market and promote blood glucose
monitoring device for diabetics and test reagents, and strengthen sales of blood collection tubes for blood
test and obtain market share by active marketing.
In the international business, we have been exposed to the pretty severe surroundings because of
tough competition to grab market share in addition to the reduction of medical expenses in many
countries. Recently medical business has been changing its confirmation and our distribution system.
We are facing the necessity to sell and supply integrated products in more combinations on eachpatient’s demands. We manufacture and sell such varieties of dialysis-related products that we canreact positively to this new market situation. Under such circumstances we understand necessity to
improve our distribution system, therefore we open more branches and keep trying to expand direct
selling net work. We give priority to better service leading to our customers’ satisfaction. With theestablishment of medical service system in developing countries, we will endeavor to provide our service
in right consideration of time place and occasion, and strengthen sales promotion. In terms of artificialorgan products, we particularly endeavor to develop and sell artificial hearts aggressively in overseas
countries. In the Medical Equipment division, we generally promote to develop and sell more productsof measures for safety.
In the pharmaceutical division, we aims to increase in product numbers of our kit products such as“liquid-and-powder” double-bag kits of antibiotics and pre-filled syringes, as well as to improve theproducts including prevention measures of malpractice.
In terms of oral drugs, while we increase our own generic products to a large extent, we focus on the
co-development of oral drugs. Furthermore we intend to develop pharmaceutically contrived products,
for instance, drugs with prominent easiness to drink. In addition, we will make efforts for early realizationof pharmaceutical products in application of recombinant human serum albumin such as artificial bloodand Drug Delivery System (DDS) and products related to recombinant protein for the renal diseases.
We will endeavor to expand our pharmaceutical business by actively developing injection drugs including
kit products and oral drugs.
In the Glass and Materials division, we will continue to innovate glass-processing technology, develop
applied uses of glass tubes, and expand the overseas market and production of the glass pre-filled
syringes. In terms of the glass for lighting purposes, we will strive to increase sales of glass materials
for LCD backlights and glass-related products in the situation of expanding business of FPD (Flat Panel
Display).
In the Supermarket division, we state the principle based on the “customers’ satisfaction”, promote
the management of respective distinctiveness, by means of expanding variety of commodities oncustomers’ demands and improving management with the participation by all members of staff. As aresult, we aim at locally dominating stores in each area with the differentiation from other competitors.
We strive to generate more profit by renovation of existing stores, adopt the LSP (Labor Scheduling
Program) to improve the operating efficiency.
In terms of drugstores, we will endeavor to improve the profitability and enhance the specialty ofhealthcare section in order to overcome severe competitions in the market.

-5-

7. Parent or Related Company(1) The Name etc. of Parent or Related Company(As of March 31, 2006)
Name

Attribute

Sanri Kosan Co., Ltd.

The listed company’s relatedcompany

Percentage of voting
rights held by parent
or related company

Stock exchange etc. where theshares of parent or relatedcompany are listed

20.62 %N/A

(2) Roles Assigned to the Listed Company in the Group of Parent or Related Company
Since the company does not belong to the group of Sanri Kosan Co., Ltd., the company is neverinfluenced by Sanri Kosan Co., Ltd., in terms of any business or personal relationship. Sanri Kosan
Co., Ltd. does not involve in the Company’s management, and the Company operate its management
independently.
(3) Transactions with Parent or Related Company
N/A

Business Results and Financial Conditions
1. Business Results(1) Summary of Overall Business and Results by Segments
Japanese economy for the period under review appeared to be slowly recovering led by robust
capital investments and individual consumption due to the improvement of corporate earnings.
Unpredictable business environment, however, has been in progress due to decelerating global
economy and jump in crude oil price as well as signs of a weak U.S. dollar in the foreign exchange
market.
Under such circumstances, we have continued to focus on development of new products andreinforced production capacity and sales capability to improve business performance.
As a result, the consolidated net sales for the period under review increased by 7.5% from theprevious period to 206,801 million yen, operating income increased by 18.5% to 12,331 million yen andrecurring income increased by 40.8% to 12,228 million yen. Net income, however, decreased by
0.1% to 4,512 million yen due to the increase in extraordinary loss resulted from recording a loss on
impairment of fixed assets.
The results by segments were as follows:a. Medical Equipment division
In the domestic business, its environment remained severe due to various factors such asincreasingly intensifying marketing battle and price competition led by the government promotion ofholding down medical costs and acceleration of joint purchase for consumables among medical
institutions.
Under such circumstances, we sought to enhance the efficiency of sales activities and strengthen
the sales bases. We also made efforts to develop and market new products in the fields of dialysis,
injection and infusion, treatment on circulatory organs and examination, as well as to promote
expansion of the business by means of product offerings in the systematized package and to expand
both our market shares and sales.
In the international business, our reinforcement of foreign sales bases resulted in acceptableperformance. OEM business have showed firm growth, and on the other hand, sales of Nipro-branded
products have also made a good progress to reach the level of sales of OEM business. In the field of
dialysis-related products, we had a tough time in the U.S. market since our sales were influenced bytakeover and grouping of the enterprises. In the other area, however, we have seen steady growth.
We are sure that our steady growth resulted from our achievement of a high reputation for the qualityof our products including excellent biocompatibility. While the dialysis industry has come to oligopoly,
we have increased in our sales of dialyzer because we have produced and sold our dialyzer made ofa unique materials different from competitor’s. Additionally, we intended to increase our share in thesynthetic type membrane dialyzer by launching the products with improved quality. We also strove toincrease sales of safety medical equipment and our injection-related products were running well.
As a result, net sales of this division increased by 10.1% from the previous period to 90,868 million
yen.

-6-

b. Pharmaceutical division
In the Pharmaceutical division, the environment of market also remained very severe, due to thegovernmental controls to suppress medical costs such as promotion of diagnosis-procedure
combination ( DPC ) and to the intensified price competition.
Under such circumstances, we strove to increase sales of powdered dialysate solutions and kit
product of substitution fluid for hemofiltration and hemodiafiltration. We also exerted ourselves toexpand sales of “liquid-and-powder” double-bag kits, pre-filled syringe kits, and injectables inplastic-ampoules. In addition, as from the year ended March 31, 2006, Nipro Genepha Corporation
and Tohoku Nipro Pharmaceutical Corporation were included in the consolidated financial statements.
As a result, net sales of this division increased by 34.4% to 35,219 million yen.
c.

Glass & Materials division
In the filed of glass for pharmaceutical purposes, sales of glass tubes for ampoule decreased dueto the impact of the change of container forms, but then sales of glass for tube bottle increased due tothe steady sales of big size products such as a nursing bottle. In the field of other glass & materials
item, though sales of glass for vacuum bottle decreased in domestic, sales of glass for lighting
purpose such as small electric bulbs for automobiles, small electric bulbs and glass for LCD backlightmade a good progress.
As a result, net sales of this division increased by 2.3% to 11,933 million yen.

d. Store division
In the retailing sectors, despite a gradual recovery trend in Japanese economy, its environment
remained relatively grim with limited recovery in individual consumption.
Under such circumstances, in the field of Supermarket, we set “improvement of customer
satisfaction” as the top priority issue, and endeavored to improve profitability by the measures such as
promotion of information-sharing by strengthening of communication, improvement of selling places byintroducing suggestion system, customer retention by utilization of data of card member,
reinforcement of weekly management and shutting down unprofitable stores. Net sales ofsupermarket business, however, decreased due to the above factors.
As regards drugstores, though our efforts to improve its profit resulted in increase of profit, sales ofthis business slightly decreased due to the shutting down some stores at the end of the previous fiscal
year and the restraint in opening new stores.
As a result, net sales of this division decreased by 5.1% to 67,261 million yen.
e. Other division
Net sales of this division, consisting mainly of sales of machine for manufacture of medical
equipment and real estate rentals, decreased by 37.9% to 1,518 million yen.

(2) Prospects for the Fiscal Year Ending March 31, 2006
The business environment is anticipated to remain severe, as there is a concern about such as
jump in crude oil prices, rise in interest rates and drastic decline of U.S. dollar.
Under the conditions, we will strive to improve the business performance by focusing on
development of new products and reinforcement of production capacity and sales capability.
For the year ending March 31, 2007, we project the consolidated net sales of 212,000 million yen(increase by 2.5% compared with the previous period), recurring income of 11,400 million yen(decrease by 6.8%), and net income of 6,000 million yen (increase by 33.0%).
Projections on net sales by segments are as follows:
Medical Equipment division: 93,800 million yen (increase by 3.2%),
Pharmaceutical division:
39,600 million yen (increase by 12.4%)
Glass & Materials division:
11,500 million yen (decrease by 3.6%)
Store division:
65,500 million yen (decrease by 2.6%)
Other division:
1,600 million yen (increase by 5.4%)(3) Matters related to Appropriation of Earnings
Annual dividends are calculated to be 37.50 yen per share, in accordance with the 50% pay-out
ratio as a criterion. As we already paid interim dividends of 16.00 yen per share, year-end dividends
are to be 21.50 yen per share; this will be proposed to the Company’s 53rd ordinary general meeting ofshareholders.

-7-2. Financial Conditions(1) Analysis of the conditions of assets, liabilities, shareholders’ equity and cash flows
Total assets increased by 44,992 million yen from the end of the previous period to 338,740 million
yen. Current assets increased by 10,498 million yen to 145,863 million yen, and fixed assets
increased by 34,493 million yen to 192,877 million yen. Main reason for the increase in current assets
was that trade notes and accounts receivable and inventories increased, and main reason for theincrease in fixed assets was that tangible fixed assets and investment securities increased.
On the other hand, liabilities increased by 29,297 million yen to 224,737 million yen. Current
liabilities increased by 15,043 million yen to 111,285 million yen, and fixed liabilities increased by
14,254 million yen to 113,452 million yen. Main reason for the increase in current liabilities was thatcurrento portion of bonds increased, and main reason for the increase in fixed liabilities was thatdeferred tax liabilities increased.
Shareholders’ equity increased by 15,690 million yen to 112,390 million yen. In this section,
earned surplus increased by 2,364 million yen to 34,545 million yen and valuation differences of othersecurities increased by 12,804 million yen to 25,563 million yen.
As for cash flows for the period, net cash provided by operating activities was 6,701 million yen, net
cash used in investing activities was 27,555 million yen, and net cash provided by financing activities
was 15,712 million yen, and as a result, cash and cash equivalents increased to 49,914 million yen.
Net cash provided by operating activities mainly reflected net income before adjustment of taxes
and amortization. Net cash used in investing activities reflected the payments for acquisition of fixed
assets for 20,359 million yen, and net cash provided by financing activities was mainly from theproceeds from issuance of bonds for 14,922 million yen.

-8-(2) Trend of the cash flow indicators

Shareholders’ equity ratio (%)
Ratio of market value ofshareholders’ equity (%)
Debt redemption (years)
Interest coverage ratio

The 50th period
Year ended
March 31, 2003

The 51st period
Year ended
March 31, 2004

Year ended
March 31, 2005

The 53rd period
Year ended
March 31, 2006

33.0

33.9

32.9

33.2

45.7

35.5

38.3

33.9

21.7
3.1

7.3
9.4

7.1
10.3

21.1
4.6

The 52nd period

Note: Shareholders’ equity ratio = Shareholders’ equity / Total Assets
Ratio of market value of shareholders’ equity = Aggregate market value of the outstanding
shares / Total Assets
Debt redemption = Interest-bearing liabilities / Cashflow from operating activities
Interest coverage ratio = Cashflow from operating activities / Interest payments- Each indicator is calculated from consolidated financial data.
- Aggregate market value of the outstanding shares is calculated as the share price at the fiscal
year-end multiplied by the number of issued shares (excluding treasury stock).
- Cashflow from operating activities is taken from cash flows from operating activities on the
consolidated statements of cash flows. Interest-bearing liabilities represent all liabilities on the
consolidated balance sheets for which interest is payable. The amount of interest payments istaken from the payments of interests on the consolidated statements of cash flows.

(CAUTION)
The statements of Target management Indicators, Management Strategies and Prospects for the
Fiscal Year Ending March 31, 2006 on this report are based on information available as of the issuingdate of this report. They certainly includes potential risks and uncertainties, therefore actual results
and prospects may considerably differ from the projected figures and the statements on this report due
to various factors.

-9-Consolidated Balance Sheets

PeriodAccount

Previous Period(as of March. 31, 2005)
AmountRatio(ASSETS)
Current Assets
Cash on hand and in banks
Trade notes and accounts
receivable

Inventories
Deferred tax assets
Other current assets
Allowance for doubtful accounts

Fixed Assets
Tangible fixed assets
Buildings and structures
Machinery, equipment andvehiclesLand
Construction in progress

OthersIntangible fixed assets
Consolidation adjustments

OthersInvestments and other assets

Investment securities
Long-term loans receivable
Deferred tax assets
Lease deposits
Other assets
Allowance for doubtful accounts

Total Assets(Unit: Millions of yen)
Current Period
Change(as of March 31, 2006)
in amount
AmountRatio%
135,36546.1%
145,86343.1

10,49856,15353,395(2,757)

40,14433,649
2,203
3,423
(209)

45,79440,558
2,151
4,320
(357)

5,649
6,909
(52)
897
(148)

158,383

53.9

192,87756.9

34,49898,78833.6

106,195

31.3

7,407

40,71843,245

2,527

23,99022,839
7,232
4,007

26,95523,079
8,210
4,704

2,964
240
978
696

941

0.3

2
939
58,653

0.4

111
1,180
20.0

41,7062,459
238
11,513
3,465(730)
293,748

1,292

85,389

108
241
25.2

68,3132,405
431
11,003
4,021
(784)
100.0

338,740

26,736
26,606
(54)
193
(510)
555
(53)

100.0

(Notes)(Previous period)(Current Period)

1.Accumulated depreciation of tangible fixed assets
2.Discounted notes receivable

96,758 mil.yen
76 〃106,320 mil.yen
223 〃3.Obligations under guarantee contracts

2,183 〃

1,638 〃

4.Pledged assets

16,500 〃17,078 〃- 10 -

350

44,992

Consolidated Balance Sheets

PeriodAccount

Previous Period(as of March. 31, 2005)
AmountRatio(LIABILITIES)Current liabilities
Trade notes and accounts payable(Unit: Millions of yen)
Current Period
Change(as of March 31, 2006)
in amount
AmountRatio%
96,241

32.7%
111,28532.8

15,04329,08440,443
3,000
4,614
3,493
1,405

31,424
44,174
10,020
4,626
3,331
1,606

2,340
3,730
7,020
11
(161)
200

Others

2,936
7,000
4,262

2,719
9,000
4,382

(217)
2,000
119

Fixed liabilities

99,198

Short-term borrowings
Current portion of bonds
Other payables
Accrued income taxes
Allowance for bonuses payable
Notes payable for plant andequipment
Commercial paper

Bonds

33.8

113,452

33.5

14,25426,00031,0305,030

14,00046,183
6,753

14,00047,03815,054855
8,301

Other fixed liabilities

2,867
3,393

2,978
3,350

110
(43)

Total liabilities

195,43966.5

224,737

66.3

29,297

1,608

0.6

1,612

0.5

3

28,66329,97232,181

9.8
10.2
10.9

28,66329,972
34,545

8.5
8.9
10.2

2,364

12,7594.3

25,563

7.5

12,804(6,289)
(586)

(2.1)
(0.2)

(5,705)
(648)

(1.7)
(0.2)

584
(62)

Total shareholders’ equity

96,70032.9

112,390

33.2

15,690Total liabilities, minority interests, andshareholders’ equity

293,748100.0

338,740100.0

44,992

Convertible type bonds with stockacquisition rights

Long-term borrowings
Deferred tax liabilities
Accrued pension and severance
cost(MINORITY INTERESTS)
Minority interests(SHAREHOLDERS’ EQUITY)

CapitalCapital surplus
Earned surplus
Valuation differences of othersecurities
Foreign currency translation
adjustments

Treasury stock(Notes)5. Number of treasury shares
Common share
6. Accounts related to unconsolidated
subsidiaries and affiliate companies
Investment securities (stock)
Investments other than stock(Previous period)(Current period)

312,968 shares

349,589 shares

5,406 mil. yen
23 〃- 11 -

4,094 mil. yen
23 〃Consolidated Statements of Income(Unit: Millions of yen)
PeriodAccount

Previous Period

Previous Period(From April 1, 2004
To March 31, 2005)(From April 1, 2005
To March 31, 2006)

AmountAmountRatio%

Changein amount

Ratio%

Net sales
Cost of goods sold192,320140,072

100.0
72.8

206,801
149,971

100.0
72.5

14,481
9,899

Gross profit

52,24727.2

56,829

27.5

4,581

41,84321.8

44,497

21.5

2,654

10,4045.4

12,331

6.0

1,927

849
124
204
173
346
2,567
1,594
741
231
8,685
1,245
21

0.4

2,705
179
508
1,475
541
2,808
1,552
702
553
12,228
201
112

1.3

1,856
54
304
1,301
195
240
(42)
(38)
321
3,543
(1,043)91

Selling, general and administrative
expenses

Operating income
Non-operating income
Interest income
Dividend income
Exchange gain
OthersNon-operating expenses
Interest expenses
Equity in loss of affiliate
OthersRecurring income
Extraordinary gains
Gain on sale of fixed assets
Reversion of allowance for doubtful
accounts
Gain on sale of investment securities

OthersExtraordinary losses
Loss on sale and disposal of fixed
assetsImpairment loss on fixed assets
Loss on disposal of inventories
Abnormal manufacturing cost
Amortization of transitional difference
from change in accounting standards ofpension and severance benefits

Retirement allowance
Cost of re-edition
Others
Net income before adjustment oftaxes
Corporate, inhabitants andenterprise taxes
Adjustment for deferred taxes
Minority shareholders’ share in net lossof consolidated subsidiaries

Net income

1.3

4.5
0.6

1.4

5.9
0.1

52

10

(42)

1,108
63
1,271

15
63
3,369

(1,092)
(0)
2,097

0.6

1.6

368
167
344

497
1,997
195
158

128
1,997
27
(185)

76

-

(76)

314

113
100
307

113
100
(7)

8,659

4.5

9,060

4.4

401

4,900
(653)

2.5
(0.3)

5,240
(540)

2.5
(0.2)

340
112

106
4,518

0.1
2.4

151
4,512

0.1
2.2

45
(6)

(Notes)Research and development expenditure included in Selling, general and administrative expenses and manufacturing
cost.
(Previous period)(Current period)
3,422 mil yen
3,760 mil yen- 12 -

Consolidated Statements of Surplus(Unit: Millions of yen)
PeriodAccount

Previous Period

Previous Period(From April 1, 2004
To March 31, 2005)(From April 1, 2005
To March 31, 2006)

AmountAmountChangein amount(CAPITAL SURPLUS)
Beginning balance of capital surplus

29,972

29,972-Ending balance of capital surplus

29,972

29,972-Beginning balance of earned surplus

30,61032,181

1,571

Increase in earned surplus
Net income

4,520
4,518

4,512
4,512

(7)
(6)

1

-

(1)

2,949
2,862

2,148
1,843

(800)
(1,018)

86

107

20

(EARNED SURPLUS)

Increase in surplus due to inclusion of
new subsidiary in consolidation

Decrease in earned surplus
Dividends
Bonuses to directors and corporate
auditors[including bonuses to corporate
auditors]

[ 2 ]

[3]

[0]

Loss on disposal of treasury
stock

-

0

0

Decrease in surplus due to inclusion of
new subsidiary in consolidation

-

197

197

32,181

34,5452,364

Ending balance of earned surplus- 13 -

Consolidated Statements of Cash Flows(Unit: Millions of yen)
PeriodAccount

Previous Period

Previous Period(From April 1, 2004
To March 31, 2005)(From April 1, 2005
To March 31, 2006)

AmountAmountChangein amount

Cash flows from operating activities

8,659
10,265
51
741

9,060
12,315
1,997
27
702

401
2,049
1,997
(23)
(38)

57
(329)
1,594
413
1,329
(1,158)
76
(191)
1,160
(86)

131
(688)
1,.552(1,377)(4,893)(5,754)
1,118(1,371)
(599)
(107)

74
(358)
(42)
(1,790)(6,223)(4,595)
1,041(1,180)(1,760)20(591)
21,992249(1,681)647(759)(3,072)
17,375514
12,628702(1,467)
1,103(597)(5,667)
6,701

1,106
(9,364)
453
213
456
161
(2,594)(10,673)(4,058)
4,622
(120)
1,737

(5,067)
4,244(9,504)3,125(1,008)(377)(9,384)
1,388(15,070)
206
(2)
57
0
(12,627)(26)(20,359)375(1,421)
1,144
(67)
0
(27,555)(26)(5,288)169(1,419)
1,087
(67)
(0)
(14,927)1,483
500
24,599(9,144)
2,979(10,000)
(80)
(391)

2,888
2,000
13,384(12,260)
14,922(3,020)
(11)
1
(63)
69
(356)

1,404
1,500
(11,215)(3,116)
11,942
6,980
(11)
1
16
69
35

Cash flows from financing activities(2,858)
7,088(1,840)15,712

1,017
8,623

Effect of exchange rate changes on cash andcash equivalents
Increase (decrease) in cash and cash equivalents(349)
11,486

1,180(3,961)

1,530(15,447)

Balance of cash and cash equivalents at the
beginning of the period

42,22853,734

11,505

19

141

121

53,73449,914(3,820)Net income before adjustment for taxes

Depreciation and amortization
Impairment loss on fixed assets
Amortization of consolidation adjustments

Equity in loss of affiliate
Increase (decrease) in allowance for doubtful
accounts

Interest and dividend income
Interest expenses
Exchange loss (gain)
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in other assets
Increase (decrease) in other liabilities
Bonuses to directors and corporate auditors
Other non-operating income/expenses andextraordinary gains/losses

SubtotalInterest and dividends received
Interest paid
Other revenues
Other expenditures
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Deposits in time deposits
Proceeds from matured time deposits
Payments for purchases of securities
Proceeds from sales of securities
Payments for acquisition of new
consolidated subsidiary
Payments for acquisition of fixed assets
Proceeds from sales of fixed assets
Lending of loans
Collections of loans receivable
Expenditures for other investments
Revenues from other investments
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Net increase (decrease) in commercial paper

Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of bonds
Payments for redemption of bonds
Payments for issuance of new stock
Proceeds from disposal of treasury stock
Payments for acquisitions of treasury stock

Proceeds from sale and lease backRepayments of finance lease obligations
Payments for dividends

Increase in cash and cash equivalents due toinclusion of new subsidiary in consolidation

Balance of cash and cash equivalents at theend of the period- 14 -

Basis of Preparation for the Consolidated Financial Statements
1. Scope of Consolidation
1) Consolidated subsidiaries: 19
・
・
・
・
・
・
・
・
・
・

Nipro Medical Industries, Ltd.
Fuzhou Nipro Co., Ltd.
Nipro Medical LTDA.
Nipro Medical Corporation
Nipro Medical Panama S.A.
Nipro Medical of Puerto Rico, Inc
Nipro Pharma Corporation
Nipro Genepha Corporation
Shanghai Nissho Vacuum Flask Refill Co., Ltd

・
・
・
・
・
・
・
・
・

Nipro (Thailand) Corporation Ltd.
Nipro (Shanghai) Co., Ltd.
Nipro Europe N.V.
Nipro Diabetes Systems, Inc.
Nipro Medica de Mexico S.A. DE C.V.
OOO Nipro Medical
Tohoku Nipro Pharmaceutical Corporation
Shinwa Shoji Co., Ltd..
Nissho Corporation

Nissho Drug Co., Ltd.

Nipro Medical Puerto Rico, Inc and OOO Nipro Medical were included in consolidation due to
new foundation, Tohoku Nipro Pharmaceutical Corporation was due to the company’s acquisition of
the stocks, and Nipro Genepha Corporation was due to the increase of its importance.
Note: Takeshima Pharmaceutical Co., Ltd amended its corporate name to Nipro Genepha
Corporation on April 1, 2005.
2) Unconsolidated subsidiaries: 3
The unconsolidated subsidiaries, Nissho Insurance Services Co., Ltd., Nipro Asia Pte. Ltd., andNipro Trading (Shanghai) Co., Ltd., are small-sized companies, whose combined total assets, net
sales, net income and earned surplus in the aggregate (averaged for recent 5 years) are not material
to the consolidated financial statements.
2. Application of Equity Method
Number of affiliate accounted for by the equity method: 1

Bipha Corporation

The equity method is not applied to the 3 unconsolidated subsidiaries, since they are not material
to the consolidated net income and earned surplus etc., either individually or in the aggregate.
3. Accounting Period of Consolidated Subsidiaries
Among the consolidated subsidiaries, Nipro (Thailand) Corporation Ltd. (Thailand), Fuzhou Nipro
Co., Ltd. Nipro (Shanghai) Co., Ltd., Shanghai Nissho Vacuum Flask Refill Co., Ltd. (China), Nipro
Medical LTDA. (Brazil), Nipro Europe N.V. (Belgium), Nipro Medical Corporation, Nipro Diabetes
Systems, Inc. (U.S.A.), Nipro Medical Panama S.A. (Panama), Nipro Medica de Mexico S.A. DE C.V.
(Mexico), Nipro medical Puerto Rico (Puerto Rico) and OOONipro Medical(Russia) close theiraccounts on March 31. Consolidated financial statements as of that date are used in preparing forconsolidated financial statements, and necessary adjustments are made to reflect significant
transactions that occurred between December 31 and March 31.
4. Accounting Principles and Practices
1) Valuation standards and methods for significant assets
a. Securities
Other securities:
Securities with market
quotations·························Valued at the market price quoted on the balance sheet date.
(Differences in valuation are presented as a component ofshareholders’ equity. Costs are determined by the weighted
average method.)
Securities withoutmarket quotations·············Valued at cost by the weighted average method
b. Inventories
Medical, Pharmaceuticaland Glass & Materials- 15 -

divisions····························Valued at cost principally by the weighted average method.
Partially first-in first-out method is used.
Supermarket division········Valued at cost by the retail method
2) Method of depreciation and amortization for significant depreciable assets
Tangible fixed assets: ······Declining-balance method
Durable years and residual values are based on the same
standards as provided by the Corporate Income Tax Law.
Buildings acquired after April 1, 1998 (excluding attachedstructures), are depreciated by straight-line method.
The foreign subsidiaries use straight-line method in
accordance with the tax laws of their countries.
3) Accounting method for deferred assets
Stock issue cost and Bond issue cost
Expensed at the time of expenditure4) Standards for recognition of significant allowancesa. Allowance for doubtful
accounts ··························· In order to cover the probable losses on collection, an
allowance for doubtful accounts is provided for the estimatedamount of uncollectible receivables. For general receivables,
the amount of provision is based on historical write-off rates, andfor the doubtful receivables, based on the specific collectability.
b. Accrued bonuses·············· In order to cover the payment of bonuses to employees, anallowance is provided for the estimated amount of bonuses to be
paid, prorated for the consolidated accounting period.
c. Accrued pension andseverance cost ················· An allowance is provided for employees pension andseverance payments based on the estimated amounts ofprojected benefit obligation and plan assets at the end of the
fiscal year.
Actuarial difference is expensed in the following fiscal years
after the year of such recognition, using the straight-line method
for five years.
5) Standards for translation of significant assets and liabilities denominated in foreign currencies into
Japanese Yen
Monetary assets and liabilities denominated in foreign currencies are translated to Japanese
yen using the spot exchange rate of the consolidated balance sheet date, and translationdifferences are recognized as gains or losses. The assets and liabilities of foreign subsidiaries
etc. are translated to Japanese yen using the spot exchange rate of their balance sheet date,
while revenues and expenses are translated using the average rate for the period. Translationdifferences are included in foreign currency translation adjustments in the Shareholders’ Equity
section.
6) Accounting method for lease transactions
Finance leases, except for those where ownership of the leased assets is deemed to betransferred to the lessee, are accounted for by the method similar to that applicable to ordinary
operating leases.
7) Other significant basis on preparation for consolidated financial statements
Consumption taxes are excluded from revenues and expenses accounts.
5.

Range of cash and cash equivalent carried on the consolidated cash flow statement.
Cash and cash equivalent carried on the cash flow statement consist of cash on hand, cash inbanks that is able to withdraw as needed, and short-term investment that will be matured within
three months after acquisition, easy to be converted into cash without much risks from fluctuation ofprices.

(Change in Accounting Method)
Impairment accounting for fixed assets
Since the current financial period, we have adopted “the Opinions on Accounting Standard for
Impairment of Fixed Assets” (issued by the Business Accounting Council of Japan on August 9, 2002) and“Guidelines for application of Accounting Standard for Impairment of Fixed Assets” (Accounting Standard
Board Guideline No.6 issued by the Financial Accounting Standards Board of Japan on October 31, 2003)
The application of the new accounting standard reduced net income before adjustment of taxes by 1,997
million yen, compared to the previous accounting method. Accumulated impairment loss is deducted
directly from each relevant asset in accordance with the revised Regulations for annual Consolidated- 16 -

Financial Statement.

(Notes to the Financial Statements)
Loss on Impairment of Fixed Assets
We, the Nipro group, recognized impairment loss on the following assets in this financial period.
Use

Type

Location

Store
Store
Leased asset
Leased asset
Idle asset

Buildings & structures, etc
Buildings & structures, etc
Land & buildings, etc
Land & buildings, etc
Land

4 sites in Hyogo pref.
8 sites in Osaka pref.
6 sites in Osaka pref.
4 sites in Niigata pref. etc
1 site in Kagoshima pref.
Total

Amount of loss
(Millions of yen)
716
505
259
484
31
1,997

We categorize its assets principally into the groups of assets for business use, leased assets, idle assets,
and assets for common use. The assets for business use are classified into groups on which separate
financial information is reported for management accounting purposes and individual store, whereas leased
assets and idle assets are individually categorized. Headquarters assets, R&D facilities, dormitory andcompany-offered houses are categorized into assets for common use, since these assets can not generatecash flow in itself.
The book value of assets whose land had significantly depreciated, or which incurred consecutive
operating losses were reduced to recoverable amount, and such deducted amount was recorded as loss on
impairment of fixed assets of 1,997 million yen in the extraordinary loss section. The loss on impairmentof fixed assets consisted of loss on buildings of 1,514 million yen, on structures of 34 million yen, on
machinery and equipment of 8 million yen, and on land of 440 million yen. The recoverable amount ofsuch asset groups are measured by their net realizable value of assets. Relevant assets were evaluatedbased on the real estate appraisal standards or on the price of the land fronting major roads for theimmaterial assets. The asset groups which were difficult to sell or which could not be used for otherpurpose, however, were evaluated as a minimum unit price. Some of the leased assets belonging to thesupermarket segment were evaluated at the utility value, which was computed with future cash flows
discounted by 4.4%.

(Related Party Transactions)
N/A(Derivative Transactions)
N/A- 17 -

(Segment information)
1. Segment information by business category(1) Previous period (From April 1, 2004 to March 31, 2005)(Millions of yen)

MedicalEquipment

Pharmaceutical

Glass &
Materials

SuperMarket(1) Sales to third parties

82,.503

26,207

11,666

70,841

1,101(2) Inter-segment sales
and transfers

876

-

2,384

-

Total

83,37926,207

14,051

Operating expenses

72,34023,946

Operating income

11,039AssetsEliminations/Corporate

Consolidated

192,320-

192,320

553

3,813

(3,813)-70,841

1,654

196,133(3,813)

192,320

12,16270,726

1,366

180,541

1,374

181,915

2,260

1,889

114

288

15,592(5,188)

10,40486,06256,556

13,82442,960857

200,261

93,487

293,748

Depreciation

4,406

3,449

630

1,169

26

9,683

582

10,265

Capital expenditures

6,056

7,269

1,452

1,005

2

15,785526

16,311

Other

Total

1. Net sales andoperating income
Net sales

2. Assets, depreciationand capital expenditures(2) Current period (From April 1, 2005 to March 31, 2006)(Millions of yen)

MedicalEquipment

Pharmaceutical

Glass &
Materials

Supermarket(1) Sales to third parties

90,86835,21911,93367,261

1,518(2) Inter-segment sales
and transfers

0

-

3,401

35

Total

90,86835,21915,335

Operating expenses

77,43833,108Operating income

13,429AssetsDepreciation

Eliminations/Corporate

Consolidated

206,801-

206,801

516

3,953

(3,953)-67,296

2,035

210,755(3,953)

206,801

13,49966,718

1,506

192,271

2,197

194,469

2,111

1,835

577

528

18,483(6,151)

12,33198,092

68,86916,18839,245

1,238

223,634

115,106

338,740

4,489

5,607

608

995

5

11,707607

12,315

31

-

-

1,490

475

1,997

-

1,997

8,959

10,621

233

348

19

20,182691

20,874

Other

Total

1. Net sales andoperating income
Net sales

2. Assets, depreciationand capital expenditures

Impairment loss
Capital expenditures- 18 -

Notes: 1. Classification of business categories and main products in each business category
Business categories are classified based on the proximity in terms of purposes and manners ofusage of the products in the market.
Main products belonging to each business categories are as follows:Business
category
MedicalEquipment

Main products and commodities
Dialyzers, blood tubing sets, injection needles, syringes, and infusion sets,
etc.

Pharmaceutical

Half-type and full-type kits, double-bag kits, pre-filled syringes, dialysate
solution, and circulatory drugs, etc.

Glass & Materials

Glass for pharmaceutical containers, glass for thermos bottles, glass forlighting purposes, stoppers for plastic containers and rubber stoppers, etc.

Supermarket

Fresh meat and fish, vegetables, fruits, processed food, daily foods, frozen
foods, general groceries and medicine, etc.

Other

Machinery for manufacture of medical equipment and real estate rental
income, etc.

2. Operating expenses of “Eliminations/Corporate” for the previous and current consolidated
accounting periods included unallocated corporate costs of 5,188 million yen and 6,151 million
yen, respectively. The unallocated corporate costs consisted primarily of the parent company’s
research and development costs and headquarters administration costs.
3. Assets of “Eliminations/Corporate” for the previous and current consolidated accounting
periods included corporate assets of 93,563 million yen and 115,320 million yen, respectively.
The corporate assets consisted mainly of parent company’s surplus operating funds (cash on
hand and in banks), long-term investment funds (investment securities) and assets related toresearch and development, as well as of the assets belonging to the headquarters administration
department.
4. Depreciation and capital expenditures included long-term prepaid expenses and its
amortization.

- 19 -

2. Segment information by geographical area
(1) Previous period (From April 1, 2004 to March 31, 2005)
Japan

America(Millions of yen)
Asia

EuropeTotal

Eliminations/Corporate

Consolidated

1. Net sales andoperating income
Net sales(1) Sales to third parties

175,327

9,790

5,816

1,385

192,320-

192,320(2) Inter-segment sales
and transfers

12,261384

310,012

22,662(22,662)-

Total

187,589

10,175

5,820

11,397214,982(22,662)

192,320

Operating expenses

171,827

10,699

6,166

10,634

199,327(17,411)

181,915

Operating income (loss)

15,762

(523)

(346)

762

15,655(5,251)

10,404

179,625

8,837

3,056

17,906

209,427

84,321

293,748

2. Assets(2) Current period (From April 1, 2005 to March 31, 2006)
Japan

America(Millions of yen)
Asia

EuropeTotal

Eliminations/Corporate

Consolidated

1. Net sales andoperating income
Net sales(1) Sales to third parties

184,154

14,682

6,312

1,652

206,801-

206,801(2) Inter-segment sales
and transfers

15,829450

410,80327,088(27,088)-

Total

199,983

15,132

6,317

12,455

233,890(27,088)

206,801

Operating expenses

181,129

15,7106,558

11,597214,996(20,526)

194,469

Operating income (loss)

18,854

(577)

(241)

858

18,893(6,562)

12,331

201,235

11,814

3,537

19,738236,325

102,415

338,740

2. Assets

Notes:

1.

Operating expenses of “Eliminations and Corporate” for the previous and current consolidated
accounting periods included unallocated corporate costs of 5,188 million yen and 6,151 million
yen, respectively.
The unallocated corporate costs consisted primarily of the parent
company’s research and development costs and the headquarters administration costs.
2. Assets of “Eliminations/Corporate” for the previous and current consolidated accounting
periods included corporate assets of 93,563 million yen and 115,320 million yen, respectively.
The corporate assets consisted mainly of parent company’s surplus operating funds (cash on
hand and in banks), long-term investment funds (investment securities) and assets related toresearch and development, as well as of the assets belonging to the headquarters
administration department.
3. Classification of countries or areas is based on geographical proximity.
4. The major countries included in each geographical area are as follows:
America···············The United States of America and Brazil
Europe ················Belgium
Asia ·····················China and Thailand- 20 -

3. Overseas sales(1) Previous period (From April 1, 2004 to March 31, 2005)

1. Overseas sales(Millions of yen)

America

Europe

Asia

Total

23,12813,606

5,232

41,966

2. Consolidated net sales
3. Percentage of overseas sales toconsolidated net sales (%)

192,320

12.0%

7.1%

2.7%

21.8%

(2) Current period (From April 1, 2005 to March 31, 2006)

1. Overseas sales(Millions of yen)

America

Europe

Asia

Total

28,876

14,073

6,407

49,358

2. Consolidated net sales
3. Percentage of overseas sales toconsolidated net sales (%)

Notes:

206,801

14.0%

6.8%

3.1

23.9%

1.
2.

Classification of countries or areas is based on geographical proximity.
The major countries included in each geographical area are as follows:
America···············The United States of America, Canada and Brazil
Europe ················Belgium, Denmark and Germany
Asia ·····················China, Taiwan and Thailand
3. Overseas sales represent those of the Company and the consolidated subsidiaries tocountries and areas outside of Japan.

(Lease Transactions)
Finance lease transactions, except for those where ownership of the leased assets is deemed to betransferred to the lessee
Previous period
Current period
Acquisition price equivalent
Accumulated depreciation equivalent

7,237 mil.yen
4,939〃

Book value equivalent

2,297

Lease commitments
Due within one year
Due after over one year

1,304 mil.yen
983
〃

Total

2,287

〃

〃

4,498 mil.yen
3,220
〃
1,277

〃

545 mil.yen
653
〃
1,198

〃

Lease payments
1,317 mil.yen
940 mil.yen
Depreciation equivalent
1,091 mil.yen
757 mil.yen
Interest expense equivalent
104 mil.yen
65 mil.yen
Method of calculation of depreciation equivalent
For the tangible fixed assets, ten ninths of the amount computed by the declining-balancemethod with 10% of hypothetical residual value for the lease term as remaining life is allocated toeach period over the lease term.
Method of calculation of interest equivalent
Difference between total lease payments and acquisition cost equivalent of leased assets
comprises interest expense equivalent, and interest expense equivalent is allocated to each period
over the lease term by the interest method.

- 21 -

(Deferred Taxes)
1. Major components of deferred tax assets and liabilities
Current period(as of March 31, 2006)
Deferred tax assets (current)
Elimination of unrealized profits
Disallowed accrued enterprise tax
Disallowed accrued bonuses
Disallowed accounts receivable
Excess of inventory book value over tax basis
Tax loss carryforwards
OthersSubtotal
Allowance accountGross deferred tax assets (current)
Offset with deferred tax liabilities (current)
Net deferred tax assets (current)
Deferred tax liabilities (current)
Reserve for special depreciation
OthersGross deferred tax liabilities (current)
Offset with deferred tax assets (current)
Net deferred tax liabilities (current)

647 mil. yen
281
652
198
153
252
100
2,286
(98)
2,187
(35)
2,151

23 mil. yen
12
35
(35)
-

Deferred tax assets (fixed)
Impairment loss
Valuation difference of land
Excess of allowance for doubtful accounts overtax-allowable amount
Excess of accrued pension and severance cost overtax-allowable amount
Disallowed loss from bad debt
Tax loss carryforwards
OthersSubtotal
Allowance accountGross deferred tax assets (fixed)
Offset with deferred tax liabilities (fixed)
Net deferred tax assets (fixed)

1,172
117
1,891
75
4,211
(1,875)
2,335(1,904)
431

Deferred tax liabilities (fixed)
Valuation differences of other securities
OthersGross deferred tax liabilities (fixed)
Offset with deferred tax assets (fixed)
Net deferred tax liabilities (fixed)

16,859 mil. yen
99
16,959(1,904)
15,054653 mil. yen
149
153

2. Reconciliation of the difference between statutory tax rate and effective tax rate after adoption oftax-effect accounting
Statutory tax rate
(Adjustments)
Permanently disallowed items such as entertainment expenses
Permanently non-taxable items such as dividends received
Unrecognized tax benefits of loss-making subsidiaries
Per capita charges of inhabitants taxes
Unrecognized tax benefits of equity in loss of affiliate
Tax credits on research and development expenses, etc.
Utilization of tax loss carryforwards
Others
Effective tax rate after adoption of tax-effect accounting- 22 -

40.5 %
2.3
(0.3)
11.6
2.1
3.1
(4.5)
(3.3)
0.4
51.9

(Securities)
1. Other securities with market quotations(Unit: Millions of yen)
Current period(as of March 31, 2006)

Previous period(as of March 31, 2005)
Acquisition
cost

Carrying
value onconsolidated
B/S

Difference

Acquisition
cost

Carrying
value onconsolidated
B/S

Difference

Stock
Bonds
Others

11,775-31,800-20,024-

21,15788

62,675
108

41,51720

Subtotal

11,77531,80020,024

21,24662,783

41,537

Stock
Bonds
Others

11
60

9
54

(1)
(5)

-

-

-

Subtotal

71

64

(7)

-

-

-

11,84731,86420,016

21,24662,783

41,537

Classification

Securities whose carrying value
exceeds their acquisition cost

Securities whose carrying value donot exceed their acquisition cost

Total
(Note)

Impairment loss is not recorded on the other securities with market quotations for the previous
consolidated accounting period and the current consolidated accounting period.
Impairment loss is recorded on the securities whose fair values at the end of the consolidated
accounting period have declined by more than 50%, unless the values are reasonably
considered to be recoverable.

2. Other securities sold during the previous and current periods

Previous period(Unit: Millions of yen)
Current period(From April 1, 2004
To March 31, 2005)(From April 1, 2005
To March 31, 2006)

Sales
proceeds

Total gains

1,737

1,108

Total losses-

Sales
proceeds
3,125

Total gains
15

Total losses-

3. Securities that do not have market quotations(Unit: Millions of yen)Previous period(as of March 31, 2005)
Carrying value on
Consolidated Balance Sheet

Other securities
Unlisted stock
Stocks of subsidiaries andaffiliates
Stocks of unconsolidated
subsidiaries
Stocks of affiliated companies
Total- 23 -

Current period(as of March 31, 2006)
Carrying value on
Consolidated Balance Sheet

4,435

1,435

722

113

4,683

3,980

9,841

5,529

(Employees Pension and Severance Benefits)
1. Outline of the adopted pension and severance benefit plan
The Company and its domestic consolidated subsidiaries have defined benefit plans, such as
tax-qualified pension plan and lump-sum severance benefit plan.
Certain foreign subsidiaries also have defined benefit plans.
2. Matters related to pension and severance liabilities
Previous period

Current period(as of March 31, 2005)(as of March 31,2006)(9,133) mil. yen(9,601)(1) Pension and severance liabilities
mil. yen(2) Pension plan assets(3) Unfunded pension and severance liabilities (1)+(2)(4) Unrecognized actuarial differences(5) Net amount on the consolidated balance sheet(3)+(4)(6) Accrued pension and severance cost

6,367
(2,766)(101)(2,867)

7,967(1,633)(1,344)(2,978)(2,867)(2,978)(Note) Certain subsidiaries adopt a simplified method in calculation of their pension and severance
liabilities.
3. Matters related to pension and severance benefit expenses(1) Service cost(2) Interest cost(3) Expected return on plan assets(4) Amortization of transitional difference that arose fromchange in accounting standards(5) Amortization of actuarial differences(6) Others (Retirement allowance)(7) Pension and severance benefit expenses(1)+(2)+(3)+(4)+(5)+(6)Previous period

Current period(From April 1, 2004
To March 31, 2005)(From April 1, 2005)
To March 31, 2006)

593 mil. yen
218
(86)

640mil. yen
226
(95)

103
223
1,052

174
113
1,060

(Note) Pension and severance benefit expenses of consolidated subsidiaries that adopt a simplified
method are included in “(1) Service cost”.
4. Matters related to the basis of calculations of pension and severance liabilities, etc.

(1) Method of allocating expected pension andseverance benefits to reporting periods(2) Discount rate(3) Expected rate of return on plan assets(4) Amortization period of actuarial differences(5) Amortization period of transitional difference that
arose from change in accounting standards- 24 -

Previous period(as of March 31, 2004)

Current period(as of March 31, 2005)

Fixed base for period

Fixed base for period

Mainly 2.5%

Mainly 2.5%

1.5%

1.5%

5 years bystraight-line methodfrom the following
fiscal years after theyear of recognition ofdifference

5 years bystraight-line methodfrom the following
fiscal years after theyear of recognition ofdifference

5 years-

Production, Orders received and Sales
1. Production(Unit: Millions of yen)

Business segment

Previous period(From April 1, 2004
To March 31, 2005)
Ratio of change fromthe previous period
Amount produced(%)

Current period(From April 1, 2005
To March 31, 2006)
Ratio of change fromthe previous period
Amount produced(%)

Medical Equipment

58,921

2.3

65,453

11.1

Pharmaceutical

25,4792.8

35,867

40.8

Glass & Materials

3,668

(4.2)

3,415

(6.9)

Other

493

(31.5)

912

84.9

Total

88,563

1.9

105,649

19.3

Notes: 1. Amounts produced are calculated based on average selling prices.
2. The above amounts are after eliminations of the inter-segment transactions.
3. The above amounts do not include the related consumption taxes etc.
2. Orders received
Since we adopt the production system based on estimated orders, there is nothing applicable
hereto regarding the amount and the balance of orders received.
3. Sales(Unit: Millions of yen)

Business segment

Previous period(From April 1, 2004
To March 31, 2005)
Ratio of change fromthe previous period
Amount sold(%)

Current period(From April 1, 2005
To March 31, 2006)
Ratio of change fromthe previous period
Amount sold(%)

Medical Equipment

82,503

4.8

90,868

10.1

Pharmaceutical

26,207

3.4

35,21934.4

Glass & Materials

11,666(1.9)

11,933

2.3

Supermarket

70,841(0.7)

67,261

(5.1)

Other

1,101

(20.6)

1,518

37.9

Total

192,320

1.9

206,801

7.5

Notes: 1. The above amounts are after eliminations of the intersegment transactions.
2. The above amounts do not include the related consumption taxes etc.

- 25 -

Summary of Non-consolidated Financial Statements

May 19, 2006

For the year ended March 31, 2006
Company name: NIPRO CORPORATION
Stock Exchange listed:
Code No:
8086
Head office location:(URL: http://www.nipro.co.jp/)
Representative: Minoru Sano, President and Representative Director
Contact:
Akihiko Yamabe, Director, General Manager of Accounting andCorporative Planning Division
Date of the meeting of theInterim dividend plan:
Board of Directors for approvalof the financial statements:
Scheduled date to commence
payment of dividends:
Unit share system:

Tokyo and Osaka

Osaka, JapanTEL (06) 6372-2331
AdoptedDate of the annual general

May 19, 2006

meeting of shareholders:June 29, 2006

June 30, 2006
Adopted (1,000 shares/unit)

3. Results for the year ended March 31, 2006 (From April 1, 2005 to March 31, 2006)(1) Results of Operations(Note: Amounts are truncated to one million yen)
Net Sales
Operating Income
Recurring Income
Year ended March 31, 2006
Year ended March 31, 2005

Millions of yen%

Millions of yen%

Millions of yen%

116,950
107,760

8.5
1.5

10,5638,308

27.1(10.0)

11,492
7,938

44.8
1.7

Millions of yen%

Earnings
per Share
Yen

4,962
5,114

(3.0)
26.0

76.67
78.75

Net Income
Year ended March 31, 2006
Year ended March 31, 2005
Notes:

Ratio of Recurringincome to Total
AssetsRatio of Net Income
to Shareholders’EquityDiluted Earnings
per share

Ratio of Recurring
Income to Net
Sales

Yen

%

%

%

-

4.3
4.8

4.1
3.1

9.8
7.4

1.The weighted average number of shares outstanding for the period:
Year ended March 31, 2006
63,548,846 sharesYear ended March 31, 2005
63,596,799 shares
2.Change in accounting method: Adopted
3.Percentages in the above table for Net Sales, Operating Income, Recurring Income and Net Income represent changes
from the previous fiscal year.

(2) Dividends
Annual dividends per share
Yen
Year ended March 31, 2006
Year ended March 31, 2005

37.50
38.50

Pay-out
ratio

Annual totalof dividends

Interimdividends
Yen

Year-end
dividends
Yen

Millions of yen

16.00
25.50

21.50
13.00

2,382
2,448

Ratio of dividends
to shareholders’equity

%

48.9
48.9

%

1.9
2.3

(3) Financial Position
Shareholders’EquityTotal Assets
Year ended March 31, 2006
Year ended March 31, 2005
Notes:

Ratio of Shareholders’Equity to Total Assets

Millions of yen

Millions of yen

298,767
256,928

122,981
108,490

Shareholder’ Equity
per Share

%

Yen

41.2
42.2

1,934.42
1,705.08

1. The number of outstanding shares at the end of the period:
Year ended March 31, 2006:
63,528,916 sharesYear ended March 31, 2005:
63,565,537 shares
2 The number of treasury stock at the end of the period:
Year ended March 31, 2006:
349,589
sharesYear ended March 31, 2005:
312,968
shares

4. Projections for the Results of the Year ending March 31, 2007 (From April 1, 2006 to March 31, 2007)

Six months ending Sept. 30, 2006

Year ending March 31, 2007

Net Sales

Recurring
IncomeNet Income

Millions of yen

Millions of yen

Millions of yen

58,000119,000

4,700
10,200

2,650
6,000

Annual dividends per Share
InterimYear-end
Dividends
Dividends
Yen
Yen
Yen

20.50
-

25.00

45.50

(Reference) Projected earnings per share for the year ending March 31, 2007: 93.03 yen* The projections shown above are prepared based on information available as of the issuing date of thisreport. The actual results may differ from the projected figures due to various factors. Concerning
the matters related to the above projections, please refer to the Page 7- 26 -

Balance Sheets
PeriodAccount

Previous Period(as of March 31, 2005)
AmountRatio(ASSETS)
Current Assets
Cash on hand and in banks

Trade notes receivable
Accounts receivable
Merchandise and finished products

Raw materials and supplies
Work in process
Prepaid expenses
Deferred tax assets
Other receivables
Other current assets
Allowance for doubtful accounts(Unit: Millions of yen)
Current Period
Change(as of March 31, 2006)
in amount
AmountRatio%
103,03640.1

44,12912,644
26,28013,779
1,760
1,030
125
884
959
1,447
(5)

%
105,351

36.3

39,71912,621
31,994
16,041
2,168
1,726
157
769
944
2,214
(5)

5,315
(4,410)
(22)
5,713
2,262
407
696
32
(115)
(14)
767
-

Fixed Assets

153,89259.9

190,415

63.7

36,523

Tangible fixed assets

33,92513.2

33,433

11.2

(491)

Buildings
Structures
Machinery

VehiclesTools and equipment
Land
Construction in progress
Intangible fixed assets
Software
Others

9,785
308
8,318
22
1,803
12,440
1,246

9,970
327
7,709
19
1,848
10,885
2,673

247

0.1

174
73

214

184
18
(609)
(2)
45
(1,554)
1,426
0.1

146
67

119,719

Investment securities

33,78353,69259,43957,30725,655
3,615

10,790
444

9,938
382

(851)
(61)

Allowance for doubtful accounts

14,639
885
4,985
957
(459)

23,039
1,377
4,893
909
(521)

8,400
492
(92)
(48)
(62)

Total Assets

256,928

Long-term prepaid expenses
Lease deposits
Other assets

100.0- 27 -

156,768(27)(5)

Investments and other assets

Stocks of related companies
Investments other than stock in
related companies
Long-term loans receivable
Long-term loans receivable fromsubsidiaries

46.6

(32)

298,767

52.4

100.0

37,04841,839Balance Sheets
PeriodAccount

Previous Period(as of March 31, 2005)
AmountRatio(LIABILITIES)Current liabilities
Trade notes payable
Trade accounts payable
Short-term borrowings
Current portion of bonds
Current portion of long-term borrowings

Other payables
Accrued expenses
Accrued income taxes
Amounts withheld for income taxes, etc.

Accrued bonuses
Notes payable for plant and equipment

Commercial paper
Other current liabilities

Fixed liabilities
Bonds
Convertible-bond-type bonds with stockacquisition rights

Long-term borrowings
Deferred tax liabilities
Accrued pension and severance cost

Lease deposits received
Total liabilities(Unit: Millions of yen)
Current Period
Change(as of March 31, 2006)
in amount
AmountRatio%
73,50228.6

14,602
12,83019,900
3,000
8,094
2,543
559
2,850
56
645
1,134
7,000
285
74,934%85,75628.7

16,433
12,592
21,30010,000
8,448
2,407
591
2,650
50
822
969
9,000
492
29.2

90,02912,253
1,830
(238)
1,400
7,000
353
(135)
32
(200)
(5)
176
(165)
2,000
206

30.1

15,09526,00031,0005,000

14,00026,223
6,032
1,674
1,004

14,00029,424
12,763
1,771
1,069

3,201
6,731
97
65

148,43757.8

175,786

58.8

27,34828,66329,972
29,972
39,795
1,196
34,743
16
192
34,535
3,855
10,646
(586)

11.1
11.7

9.6
10.1

4.1
(0.2)

28,66329,972
29,97242,8081,196
37,29616
145
37,135
4,315
22,186
(648)

7.4
(0.2)

3,012
2,552
(47)
2,600
460
11,540(62)

Total shareholders’ equity

108,49042.2

122,98141.2

14,490Total liabilities and shareholders’ equity

256,928100.0

298,767

100.0

41,839(SHAREHOLDERS’ EQUITY)

CapitalCapital surplus
Capital reserve
Earned surplus
Revenue reserve
Voluntary reserves
Reserve for dividends
Reserve for special depreciation
Special reserve
Unappropriated retained earnings
Valuation differences of other securities

Treasury stock

15.5- 28 -

14.3

Statements of Income(Unit: Millions of yen)
PeriodAccount

Previous Period

Current Period(From April 1, 2004
To March 31, 2005)(From April 1, 2005
To March 31, 2006)

AmountRatio

AmountChange inamountRatio ofchange

Ratio

%

%

Net sales
Cost of goods sold107,760
82,305100.0
76.4

116,950
87,751

100.0
75.0

9,190
5,445

8.5
6.6

Gross profit

25,45423.6

29,199

25.0

3,745

14.7

17,146

15.9

18,636

16.0

1,489

8.7

Operating income

8,308

7.7

10,563

9.0

2,255

27.1

Non-operating income

932
300
186
340
104
1,303
394
843
20
44
7,938

0.9

2,185
404
484
1,053
242
1,256
426
716
78
35
11,492

1.9

1,252
103
297
713
137
(46)
31
(127)
58
(8)
3,554

134.2

133
100
19

0.1

Selling, general and administrative
expenses

Interest income
Dividend income
Exchange gain
OthersNon-operating expenses
Interest expenses
Interest on bonds
Bond issue cost
OthersRecurring income
Extraordinary gains

1.2

7.4

9.8

Governmental subsidies

1,144
10
-

Reversion of allowance for
doubtful accounts

24

-

(24)

1,108
0
249

10
3
3,270

(1,097)2
3,021

Gains on sales of fixed assets

Gain on sale of investment
securities

OthersExtraordinary losses
Losses on sales and disposals of
fixed assets
Impairment loss on fixed assets
Loss on devaluation of
investment in affiliates

Compensation payment
Others
Net income before income
taxes
Corporate, inhabitants andenterprise taxes
Adjustment for deferred taxes
Net income
Retained earnings at the
beginning of the period
Loss on disposal of treasury
stock
Interim dividends
Unappropriated retained
earnings

1.1

1.1

0.3

2.8

368
1,779

178
1,779

38
21

851
57
214

851
18
193

8,832

8.2

8,354

7.1

(478)

4,026
(308)

3.8
(0.3)

4,400
(1,008)

3.8
(0.9)

374
(700)

5,114

4.7

4,962

4.2

(152)

370

1,621

0
1,016

3,855

4,315

- 29 -

44.8(1,010)
89
19

189
-

363

(3.6)

460

(5.4)

(3.0)

Proposal for Appropriation of Retained Earnings(Unit: Millions of yen)
PeriodAccount

Previous Period

Current Period(From April 1, 2004
To March 31, 2005)(From April 1, 2005
To March 31, 2006)

AmountAmountChangein amount

Unappropriated retained earnings

3,855

4,315

460

Disposal of voluntary reserves
Reserve for special depreciation
Total

47
47
3,902

44
44
4,359

(3)
(3)
456

Appropriations of retained earnings
Cash dividends[per share]

3,532
826
[13.00 yen]

4,055
1,365
[21.50 yen]523
539
[8.50 yen]

Bonuses to directors and corporate
auditors[including bonuses to corporate
auditors]

106
[3]

89
[3]

(16)
[(0)]

Special reserve
Retained earnings carried forward

2,600
370

2,600
303

(66)

Notes: 1. Reserve for special depreciation is reserve under the Special Taxation Measures Law.
2. On December 9, 2005, the Company appropriated 1,016 million yen for interim dividends (16 yen
per share).

- 30 -

Significant Accounting Principles
1. Valuation standards and methods for securities
Stocks issued by subsidiaries
and affiliated companies ·············Valued at cost by the weighted average method
Other securities
Securities with market
quotations ·······························Valued at market price quoted on the balance sheet date.
(Differences in valuation are presented as a component ofshareholders’ equity. Costs of sales are determined by theweighted average method.)
Securities without market
quotations ·······························Valued at cost by the weighted average method
2. Valuation standards and methods for inventories
Merchandises, finished products
and work in process ····················Valued at cost by the weighted average method
Raw materials and supplies········Valued at cost by the first-in first-out method
3. Method of depreciation and amortization for fixed assets
Tangible fixed assets: ·················Declining-balance method
Durable years and residual values are based on the same
standards as provided by the Corporate Income Tax Law.
Buildings acquired after April 1, 1998 (excluding attachedstructures), are depreciated by straight-line method.
Intangible fixed assets ················Straight-line method
Durable years are based on the same standards as provided
by the Corporate Income Tax Law.
However, the software for internal use is amortized by thestraight-line method for the period during which it is available in
the Company (5 years).
Long-term prepaid expenses ······Straight-line method
Periods of amortization are based on the same standards asprovided by the Corporate Income Tax Law.
4. Accounting method for deferred assets
Bond issue cost···························Expensed at the time of expenditure
5. Standards for recognition of allowances
Allowance for doubtful
accounts······································In order to cover the probable losses on collection, an
allowance for doubtful accounts is provided for the estimatedamount of uncollectible receivables. For general receivables,
the amount of provision is based on historical write-off rates, andfor the doubtful receivables, based on the specific collectibility.

Accrued bonuses ························ In order to cover the payment of bonuses to employees, anallowance is provided for the estimated amount of bonuses to be
paid, prorated for the consolidated accounting period.
Accrued pension andseverance cost···························· An allowance is provided for employees pension andseverance payments based on the estimated amounts ofprojected benefit obligation and plan assets at the end of the
fiscal year.
Actuarial difference is expensed in the following fiscal years
after the year of such recognition, using the straight-line method
for five years.

- 31 -

6. Accounting method for lease transactions
Finance leases, except for those where ownership of the leased assets is deemed to betransferred to the lessee, are accounted for by the method similar to that applicable to ordinary
operating leases.
7. Other significant basis on preparation for financial statements
Consumption Taxes
Consumption taxes are excluded from revenues and expenses accounts.

(Change in Accounting Method)
Impairment accounting for fixed assets
Since this financial period we have adopted “the Opinions on Accounting Standard for Impairment of
Fixed Assets” (issued by the Business Accounting Council of Japan on August 9, 2002) and “Guidelines forapplication of Accounting Standard for Impairment of Fixed Assets” (Accounting Standard Board Guideline
No.6 issued by the Financial Accounting Standards Board of Japan on October 31, 2003) The applicationof the new accounting standard reduced net income before adjustment of taxes by 1,779 million yen,
compared to the previous accounting method. Accumulated impairment loss is deducted directly fromeach relevant asset in accordance with the revised Regulations for Annual Consolidated Financial
Statements.

Notes to the Financial Statements(Balance Sheet)(Previous period)(Current period)

1. Accumulated depreciation of tangible fixed assets

46,774 mil. yen

48,085 mil. yen

2. Balances with related companies
Short-term receivables
Long-term receivables
Short-term payables

10,111 mil. yen
14,6399,801

15,022 mil. yen
23,03910,725

3. Pledged assets
Buildings
Land5,156 mil. yen
2,685

4,793 mil. yen
2,685

4. Obligations under guarantee contracts

15,209 mil. yen

14,216 mil. yen

5. Obligations as a co-surety

1,666 mil. yen

1,458 mil. yen

6. Notes receivable discounted

76 mil. yen

24 mil. yen

7. Number of treasury shares
Common share

312,968 shares

349,589 shares(Previous Period)(Current Period)

1. Amounts of transactions with related companies
Sales
Purchases
Other operational transactions
Non-operational transactions

16,698 mil. yen
30,479178
335

21,410 mil. yen
32,515146536

2. Research and development expenses included inselling, general and administrative expenses

2,594 mil. yen

2,901 mil. yen(Statement of Income)- 32 -

(loss on impairment of fixed assets)
The company recognized impairment loss on following assets in this period.
Amount of loss
(Millions of yen)

Use

Type

Location

Leased assets
Leased assets
Idle assets

Land & buildings, etc
Land & buildings, etc
Land

2 sites in Osaka pref.
3 sites in Niigata pref. etc
1 site in Kagoshima pref.
Total

1,389
358
31
1,779

The company categorizes its assets principally into the groups of assets for business use, leased assets,
idle assets, and assets for common use. The assets for the business use are classified into groups onwhich separate financial information is reported for management accounting purposes, whereas leased
assets and idle assets are individually categorized. Headquarters assets, R&D facilities, dormitory andcompany-offered houses are categorized into assets for common use, since these assets can not generatecash flow in itself.
The book value of assets whose land had significantly depreciated, or which incurred consecutive
operating losses were reduced to recoverable amount, and such deducted amount was recorded as loss on
impairment of fixed assets of 1,779 million yen in the extraordinary loss section.
The loss on impairment of fixed assets consisted of loss on buildings of 192 million yen, on structures of 0
million yen and on land of 1,586 million yen. The recoverable amount of such asset groups is measured
by the net realizable value of assets 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 aminimum unit price.

Net Sales by Division and Proportion to the Total(Millions of yen)
PeriodDivision

Previous Period

Current Period(From April 1, 2004
To March 31, 2005)(From April 1, 2005
To March 31, 2006)

AmountAmountRatio%

Change inAmount

Ratio
%

Ratio
of
change%Medical Equipment division

78,027

72.4

84,105

71.9

6,078

7.8

Pharmaceutical division

16,54015.3

18,228

15.6

1,688

10.2

Glass & Materials division

11,82711.0

12,426

10.6

599

5.1

Other

1,365

1.3

2,190

1.9

824

60.4

Total

107,760

100.0

116,950

100.0

9,190

8.5

[including Exports][36,510]33.9[42,105]

36.0[5,595]

15.3- 33 -

(Lease Transactions)
Finance lease transactions, except for those where ownership of the leased assets is deemed to betransferred to the lessee(Previous period)(Current period)

Book value equivalent

960 mil. yen
606
353

903 mil. yen
592
310

Lease commitments
Due within one year
Due after over one year
Total

181 mil. yen
301
483

177 mil. yen
262
439

Lease payments
Depreciation equivalentInterest expense equivalent

218 mil. yen
218
11

213 mil. yen
202
10

Acquisition price equivalent
Accumulated depreciation equivalent

Method of calculation of depreciation equivalent
For the tangible fixed assets, ten ninth of the amount computed by the declining-balance methodwith 10% of hypothetical residual value for the lease term as remaining life is allocated to each period
over the lease term.
Method of calculation of interest equivalent
Difference between total lease payments and acquisition cost equivalent of leased assets
comprises interest expense equivalent, and interest expense equivalent is allocated to each period
over the lease term by the interest method.

(Securities)
As of March 31, 2005 and 2006, there was no stock issued by subsidiaries or affiliated companies thathave market quotations.

- 34 -

(Deferred Taxes)
1. Major components of deferred tax assets and liabilities
Current Period(as of March 31, 2006)
Deferred tax assets (current)
Disallowed accrued enterprise tax
Disallowed accrued bonuses
Disallowed accounts receivable
OthersGross deferred tax assets (current)
Offset with deferred tax liabilities (current)
Net deferred tax assets (current)

243
332
198
18
792
(23)
769

Deferred tax liabilities (current)
Reserve for special depreciation
Gross deferred tax liabilities (current)
Offset with deferred tax assets (current)
Net deferred tax liabilities (current)

23 mil. yen
23
(23)
-

Deferred tax assets (fixed)
Loss on impairment of fixed assets
Valuation difference of land
Difference in recorded amount of stock of relatedcompany
Loss on devaluation of stock of related company
Excess of allowance for doubtful accounts overtax-allowable amount
Excess of accrued pension and severance cost overtax-allowable amount
Disallowed loss from bad debt
OthersGross deferred tax assets (fixed)
Offset with deferred tax liabilities (fixed)
Net deferred tax assets (fixed)

717
117
34
2,383
(2,383)-

Deferred tax liabilities (fixed)
Reserve for special depreciation
Valuation differences of other securities
Gross deferred tax liabilities (fixed)
Offset with deferred tax assets (fixed)
Net deferred tax liabilities (fixed)

45 mil. yen
15,101
15,147(2,383)
12,763714 mil. yen
149
193
344
111

2. Reconciliation of the difference between statutory tax rate and effective tax rate after adoption oftax-effect accounting
The note is omitted, because the difference between statutory tax rate and effective tax rate after
adoption of tax-effect accounting is less than 5% of statutory tax rate.

Changes in Directors and Corporate Auditors
Changes in directors and/or corporate auditors was already disclosed on May 19, 2006.

- 35 -