Consolidated Financial Statements
For the year ended March 31, 2009
May 15, 2009
Stock Exchange
listed:URL:

Company name: NIPRO CORPORATION
Code No:
Representative:
Contact:

8086
Minoru Sano, President and Representative Director
Akihiko Yamabe, Director, General Manager of
Accounting and Corporative Planning Division
Date of the general shareholder’s meeting to be held: June 26, 2009
Scheduled date of the annual securities report filing: June 26, 2009
Scheduled date to commence payment of dividends: -Tokyo and Osaka
http://www.nipro.co.jp/

TEL(06) 6372-2331

1. Consolidated Results for the Year ended March 31, 2009 (From April 1, 2008 to March 31, 2009)(1) Consolidated Results of Operations(Note: Amounts are truncated to 1 million yen)
Net Sales
Operating Income
Recurring Income
Net Income
Millions of yen

175,944
172,113

Year ended March 31, 2009
Year ended March 31, 2008

Note:

Millions of yen%

14,775
13,6778.0
4.8

Millions of yen

9,890
9,669

%

Millions of yen

2.3(14.8)

4,530
4,454

%

1.7
(47.9)

Yen

DilutedEarnings
per share
Yen

Ratio of Net Income
to Shareholders’Equity%Ratio of Recurringincome to Total
Assets%Ratio of Operating
Income to Net
Sales
%

71.41
70.17

-

4.2
3.7

2.9
2.8

8.4
7.9

Earnings
per Share
Year ended March 31, 2009
Year ended March 31, 2008

%

2.2
(6.6)

Equity in profit (loss) of affiliate Year ended March 31, 2009:

88 million yen

Year ended March 31, 2008:

15 million yen(2) Consolidated Financial Position
Total Assets
Year ended March 31, 2009
Year ended March 31, 2008
Note:

Shareholders’ equity:

Net Assets

Millions of yen

Millions of yen

330,640
349,30296,560
119,544

Year ended March 31, 2009:

Net Assets per
Share

Equity Ratio
%

Yen

28.7
33.8

95,049 million yen

1,498.47
1,861.79

Year ended March 31, 2008:

118,155 million yen

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

18,851
9,675(21,186)(30,072)786
22,26745,35247,656

Year ended March 31, 2009
Year ended March 31, 2008

2. Dividends
Annual dividends per shareFirstquarter
Yen

Secondquarter
Yen

Thirdquarter
Yen

Year-end
Dividends

Annualdividends

Yen

Yen

-

28.00
32.00
21.50

-

9.50
0.00
27.00

37.50
32.00
48.50

Year ended March 31, 2008
Year ended March 31, 2009
Year ending March 31, 2010
(Projected)

Annual totalof dividends

Pay-out
ratio(Consolidated)%

Millions of yen

2,380
2,030

Ratio of dividends
to Net Assets(Consolidated)

%

53.4
44.8
50.9

2.0
1.9

3. Projected Consolidated Financial Results for the Year ending March 31, 2010 (From April 1, 2009 to March

31, 2010)
Operating
IncomeNet Sales
Millionsof yen%Millionsof yenSix months ending Sept. 30, 2009

Recurring
Income%Millionsof yenEarnings
per Share

Net Income%

Millionsof yen%Yen

87,300
0.8
6,400
(8.0)
5,200 (25.0)
2,250 (33.9)
35.46
180,000
2.3
15,0001.5
13,000
31.4
6,050
33.5
95.35
Note: The % displays in the line of six months ending Sept. 30, 2009 show increase/decrease ratio against the six
months ended Sept.30, 2008. The % displays in the line of Year ending March 31, 2010 show increase/decrease ratio
against the year ended March 31, 2009
Year ending March 31, 2010-1-

4. Others(1) Change in significant subsidiaries during the year ended March 31, 2009(Resulting in a change in scope of
consolidation): None
(2) Changes in accounting principles, procedures or presentation related to the preparation of consolidated financial
statements (i.e., mentioned or referred to “Change in significant matter of basis of preparation for consolidated financial
statements”)
1) Changes due to adoption of new accounting standards: Yes
2) Changes other than those included in 1) above: None
(Note) Please see page 19 “Change in significant matter of basis of preparation for consolidated financial
statements” for further details.
(3) Total number of common shares issued
1) Total number of common shares issued (Including treasury stock):
Year ended March 31, 2009: 63,878,505 sharesYear ended March 31, 2008: 63,878,505 shares2) Total number of shares in treasury:
Year ended March 31, 2009: 447,874 sharesYear ended March 31, 2008: 415,037 shares(Note) Please see page 32 “Per share information” to confirm the share numbers to be basis of calculation of Earningper share (Consolidated).

(Reference) Overview of Non-consolidated financial results
1. Results for the year ended March 31, 2009 (From April 1, 2008 to March 31, 2009)(Note: % shows increase/decrease ratio against the previous year)(1) Results of Operations
Net Sales
Operating Income
Recurring Income
Year ended March 31, 2009
Year ended March 31, 2008

Millions of yen%

Millions of yen%

Millions of yen%

135,256
135,0350.2
6.0

10,161
12,273(17.2)
14.7

8,265
8,618

(4.1)
(21.9)

Earnings
per Share

Net Income
Year ended March 31, 2009
Year ended March 31, 2008

Diluted Earnings per share

Millions of yen

%

Yen

Yen

540
4,848

(88.8)(53.5)

8.52
76.39

-

(2) Financial Position
Total Assets

Shareholders’ equity:

Millions of yen

282,408
309,863

109,206
124,172

Year ended March 31, 2009:

Net Assets per
Share

Equity Ratio

Millions of yen
Year ended March 31, 2009
Year ended March 31, 2008
Note:

Net Assets

%

Yen

38.7
40.1

1,721.67
1,956.60

109,206 million yen Year ended March 31, 2008:

124,172 million yen

2. Projections for the Results of the Year ending March 31, 2010 (From April 1, 2009 to March 31, 2010)
Operating
IncomeNet Sales
Millions ofyen%Millionsof yenRecurring
Income%Millionsof yenEarnings
per
Share

Net Income%

Millionsof yen%Six months ending Sept. 30, 2009
Year ending March 31, 2010

Yen

65,000(5.5)
4,700 (16.1)
4,500 (23.6)
2,750 (32.8)
43.34
135,000(0.2)
10,4002.3
10,400
25.8
6,200
97.72
Note: The % displays in the line of six months ending Sept. 30, 2009 show increase/decrease ratio against the six
months ended Sept.30, 2008. The % displays in the line of Year ending March 31, 2010 show increase/decrease ratio
against the year ended March 31, 2009

*Disclaimer regarding projection information including appropriate use of forecasted financial results, and other special notes
The projection figures shown above are based on information that was available at the time of preparation and may containcertain uncertainties. Actual performance and other factors may differ from these projections due to changes in circumstancesand other developments. More information concerning these forecasts can be found in section 1. Business results on page 3 in
the attachments.

-2-

1. Business Results(1) Analysis concerning business results
1) Business results for the period under review and the results by segments
Word economy for the period under review had slow downed yet again due to turmoil in theAmerican financial markets, generally undergoing the rising specter of recession while violent ups anddowns in oil and raw material prices and affection from strong yen rate in the Japanese economy.

Under such circumstance, our group has continuously promoted to develop innovative medical
equipment in the fields of artificial organs and regenerative medicine as well as made effort toinjection drug and oral drug business to grow our business and improve the performance.
The results by segments were as follows:a. Medical equipment division
In the domestic business, drug prices and official call price of specific-insurance medical materials
were drastically driven down as the medical fee scheme was revised last April. Additionally, our businessenvironment became even more sever, because more and more hospitals have begun to introduce
Diagnostic Procedure Combination system (hereafter called as “DPC”) which is a comprehensive
reimbursement system of medical cost for acute stage inpatient, and the material price and delivery costalso rose.

Under such circumstances, we shows consistent growth in the each fields of dialysis-related
products, injection and infusion-related products, diabetes-related-products, vascular-related
products by means of more active promotion of sales, improvement in sales efficiency andexpansion in core products’ assortment.
In the International business, we were severely affected by the strength of the yen against the
dollar and Euro owing to the worldwide financial crisis started with American sub-prime loans. Under
such circumstances, the influence of sharp exchange rate fluctuations was inevitable and our sales
amount had hit the wall, although we raised the prices and took cost-cutting measures. We, however,rose at a double-digit pace selling quantity of the core products, such as dialyzer, blood circuit, dialysis

machine, AVF (Arterial Venous Fistula) needle and diabetes-related-products.
As a result, net sales of this division increased by 1.7% from the previous period to 112,969 millionyen.
b. Pharmaceutical division
In the Pharmaceutical division, we advanced the sales of characteristics drugs and medicines,
thanks to the policies for the popularization of generic products in the aging of the population andincrease of the establishments introducing DPC. As a result, we steadily raised the sales of
dialysis-related products such as powdered dialysate solutions and kit product of substitution fluidfor hemofiltration and hemodiafiltration, as well as liquid-and-powder double-bag kits, pre-filled
syringe kits and such oral drug as orally disintegrating tablets and extended-release tablets.
In the contract manufacturing business, we built up the structure which enables to stably supply thehigh-quality products, by mean of expanding the production capacity such as a new plant and apackaging plant for contract manufacture of oral drug, as the largest contract manufacturer ofpharmaceutical products in Japan, conducting the production facilities.

As a result, net sales of this division increased 8.1% from the previous period to 52,725 million
yen.

-3-

c.

Glass & Materials division
In the filed of glass for pharmaceutical purposes, the sales of pill bottle increased healthy, though
the sales of glass tubes for ampoule decreased.
In the field of other glass & materials products, the total sales decreased, though the sales ofglass for vacuum bottle showed a slight decline, however, the sales of lighting glass for LCD andautomobile-related decreased sharply, in addition to the lagging sales of goods for massconsumption.
As a result, net sales of this division decreased 16.5% from the previous period to 9,553 millionyen.

d. Other division
Net sales of other division, consisting mainly of sales of machine for manufacture of medical
equipment and real estate rentals, decreased 17.0% from the previous period to 695 million yen.
As a result, net sales amounted to 175,944 million yen, increased 2.2 %.
About the profit, operating income increased 8.0% from the previous period to 14,775 million yen
due to the increase of gross profit in medical equipment and pharmaceutical divisions and ordinary
profit increased 2.3% from the previous period to 9,890 million yen.Net income also increased 1.7%
from the previous period to 4,530 million yen.
2) Prospects for the subsequent fiscal and projections by segments
While we can not foresee improvement in the recession of business condition in the UnitedStates and the deceleration of European economy, it is anticipated to remain more unpredictable infuture world economy as well as in Japanese economy to remain quite severe as putting pressure
on corporate profits by strong yen rate and escalation of competitions among enterprises.
Under such circumstances, we will strive to improve production efficiency continuously andestablish low-cost structuring for reinforcement of management base.
For the year ending March 31, 2010, we project the consolidated net sales of 180,000 million yen(to increase 2.3% compared with the period under review), operating income of 15,000 million yen(to increase 1.5% compared with the period under review), recurring income of 13,000 million yen(to increase 31.4% compared with the period under review), and net income of 6,050 million yen(to increase 33.5% compared with the period under review), under the projected exchange rate of
90 yen to the U.S. dollar.
Projections on net sales by segments are as follows:
Medical Equipment division: 110,000 million yen(to decrease 2.6% compared with the previous period)
Pharmaceutical division:
59,400 million yen(to increase 12.7% compared with the previous period)
Glass & Materials division: 9,800 million yen(to increase 2.6% compared with the previous period)
Other division:
800 million yen(to increase 15.1% compared with the previous period)(2) Analysis concerning financial position (consolidated)
1) Analysis concerning the conditions of assets, liabilities, net assets and cash flows
Total assets decreased 18,661 million yen from the end of the previous period to 330,640 million
yen. Current assets decreased 1,881 million yen to 160,865 million yen, and fixed assets decreased
16,780 million yen to 169,775 million yen.
Main reason for the decrease in current assets was that trade notes and accounts receivable
decreased, and main reason for the decrease in fixed assets was that investment securities
decreased significantly due to the underperforming stock exchange market.
Total liabilities increased 4,322 million yen to 234,080 million yen. Current liabilities increased 5,960
million yen to 114,795 million yen, and fixed liabilities decreased 1,638 million yen to 119,284 million
yen.
Main reason for the increase in current liabilities was that notes payable for plant and equipment
increased, and main reason for the decrease in fixed liabilities was that deferred tax liabilities
decreased.
Net assets decreased 22,983 million yen to 96,560 million yen. Shareholders’ equity increased-4-

1,923 million yen to 99,244 million yen, but valuation and translation difference decreased 25,030
million. The main reason for the decrease in valuation and translation difference was that theunrealized gain on valuation of marketable securities and foreign currency translation adjustment
decreased.
The ending balance of cash and cash equivalents in the period under review decreased 2,304
million yen to 45,352 million yen.
The conditions and main factors of each cash flow during the period under review were as follows.
(Cash flows from operating activities)
Net cash provided by operating activities was 18,851 million yen, increased by 94.8% from theprevious period.
The main accounts of cash inflow were net income before adjustment of taxes, 9,379 million yen,depreciation and amortization, 1,819 million yen. The main accounts of cash outflow were increase of
inventories, 6,539 million yen and payment of corporate income tax, 3,521 million yen.
(Cash flows from investing activities)
Net cash used in investing activities was 21,186 million yen.
The main account of cash outflow was payments for acquisition of fixed assets, 20,856 million yen.
(Cash flows from financing activities)
Net cash provided by investing activities was 786 million yen.
The main accounts of cash inflow were proceeds from long-term borrowings, 27,300 million yen,and proceeds from issuance of bonds, 4,979 million yen. The main accounts of cash outflow wererepayment of long-term borrowings, 15,881 million yen, and payment for redemption of bonds, 15,150
million yen.

-5-2) Trend of the cash flow indicators
Year ended
March 31, 2006

The 54th period
Year ended
March 31, 2007

The 55th period
Year ended
March 31, 2008

The 56th period
Year ended
March 31, 2009

33.2

37.3

33.8

28.7

33.9

43.4

31.6

29.4

21.1
4.6

8.3
8.5

15.6
5.1

8.2
6.8

The 53rd period

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

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 / Cash flow from operating activities
Interest coverage ratio = Cash flow 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).
- Cash flow 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.
(3) Basic Policies on Distribution of Profits and Dividends for years ended March 31, 2009 and ending
March 31, 2010.
As we position profit return in the important administrative measures, our policy is that 50% of the
non-consolidated net income is to be distributed to shareholders.
Retained earnings are to be actively invested in the sales and production facilities as well as inresearch and development to ensure profit over future and to realize view of expanding the firmmanagement basis and long-term business developments, so as to ensure sustainable profits in the
future and continuous growth.
About annual dividends, dividend payout ratio substantially exceeded 50% as we already paid interim
dividends of 32.00 yen per share. We are to pass the year-end dividends, much to our regret.
Dividends for year ending March 31, 2010 are expected to be made according to theabove-mentioned policy.

-6-

Corporate GroupOur group consists of the Reporting Company (“the Company”), its 27 subsidiaries and 2 affiliates, andis primarily engaged in manufacture and sale of medical equipment, pharmaceutical products and glassand material products.
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.
Cell Science & Technology Institute, Inc., an affiliate, develops, manufactures and sells
cell-culture-related products.
Overseas:

Nipro (Thailand) Corporation Ltd. (Thailand), Nipro (Shanghai) Co., Ltd. (China) andNipro Medical LTDA. (Brazil), and other manufacturing subsidiary purchase some of raw
materials and machinery for their production from the Company, manufacture medical
equipment, and sell through the Company and its subsidiaries as well as locally on theirown.
Nipro Europe N.V. (Belgium), Nipro Medical Corporation (U.S.A.), and Nipro Asia Pte. Ltd.
(Singapore) and other sales subsidiaries sell medical equipment etc. in the areas of theirlocations.
Nipro Diabetes Systems, Inc. (U.S.A.) develops and sells diabetes-related products suchas insulin pump.
Please note that, Nipro Industria E Commercio de Produtos Cardiopulmonares Ltda.
ceased to exist as of January 23rd, 2009 as a result of the merger with Nipro Medical
LTDA..

<Pharmaceutical Division>
The Company, Nipro Pharma Corporation and Nipro Genepha Corporation, Zensei
Pharmaceutical Industries Co., Ltd and NIPRO PATCH CO., LTD. (Altered the corporatestname from “Saitama Daiichi Pharmaceutical Co., Ltd. on July 1 , 2008) manufacture andsell pharmaceutical products. In addition, 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 as well as manufactures and sells glass products.
Please note that, Shinwa Shoji Co., Ltd. ceased to exist as of August 1st, 2008 as a resultof the merger with the Company.
Overseas:

Shanghai Nissho Vacuum Flask Refill Co., Ltd. (China) sells internal glass sections of
vacuum flask and other glass products.

<Other>
The Company manufactures (purchases, in some cases) and sells machinery for
manufacture of medical equipment, etc.
The Company and Wasyu Kogyo Co., Ltd. lease real estate properties.
Nissho Insurance Services Co., Ltd. operates non-life insurance agency mainly for thegroup companies.
Sanri Kosan Co., Ltd., the other related company, is engaged in leasing of real estate
properties.
The above explanations are illustrated as follows:-7-

(Domestic)(Overseas)
Medical Equipment Division

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

◎ Nipro Medical Industries, Ltd.
<Development,
and Sale>◎Nipro (Shanghai) Co., Ltd.
◎Nipro Medical LTDA.

Manufacture<Sale>◎Nipro Europe N.V.
◎Nipro Medical Corporation◎Nipro Asia Pte. Ltd.
And 11 other subsidiaries■ Cell Science & Technology
Institute, Inc.
Pharmaceutical Division<Manufacture and Sale>◎ Nipro Pharma Corporation<Development and Sale>◎Nipro Genepha Corporation◎Zensei Pharmaceutical Industry Co., Ltd.
◎Nipro Patch Co.,Ltd.

<Manufacture>◎Tohoku Nipro
Pharmaceutical Corporation<Development,
and Sale>

Manufacture◎Nipro Diabetes Systems, Inc.

Nipro Corporation<Manufacture and Sale>

Glass & Materials Division<Sale>□Bipha Corporation◎Shanghai Nissho Vacuum Flask
Refill Co., Ltd.

Other

Supply of products andmerchandises<Non-life insurance agency>

Supply of raw materials○Nissho Insurance Services Co.,
Ltd.

Other transactions<Rental of real estate>○Wasyu Kogyo Co.,Ltd.

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

-8-◎

Consolidated subsidiary○

Unconsolidated subsidiary□■

Affiliate accounted for by theequity method
Affiliated company△

Other related company

3. Management Policies(1) Basic Policies of Management
Since our foundation of year 1954 with concept of “technology innovation”, we have grown by
pursuing the technologies to produce unique products which can always solve QOL (Quality of Life) of
patients and subjects in Medical treatment sites, under philosophy in contributing to the society throughcorporate activities.
As a management structure considering compatibility between “stability” and “growth” that is mostimportant for a 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) Target Management Indicators
Our performance targets were to achieve 200 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, but we set up new targets to achieve 500 billion yen of consolidated net sales and 40 billion
yen of recurring income, in order to promote further growth of business. To realize this new goal, weare going to move towards steady business development by means of improved management andefficiency.
(3) Medium- and Long-term Management Strategies
In the core business such as medical equipment and pharmaceutical division, the Group adopts abasic policy and corporate strategies which aim to expand sales by means of strengthening
cost-competitiveness in response to world markets, intensively increasing the production capacity in thefields expected to expand in quantity.
In the Medical Equipment division, we are aiming at top share of our current main product, dialyzer inthe world by intensive mass production, improvement of its quality and cost reduction driven from fullself-production of the main raw materials, hollow fibers. We will also develop our business on global
markets, striving to strengthen the product lineup, focus on new-product development and establish
sales-bases, in the field of artificial lung and intravascular treatment,

As the research aimed at practical use of iPS (induced Pluripotent Stem cell) are advancing, we areseeing cell culture and regeneration medicine area as growth fields and going to advance the approachto develop the business in those area as our key business.
In the Pharmaceutical division, we enhance our production system of all fields such as injection drug,
oral drug and external application drug so as to growth the contract manufacturing business meetingthe needs of customers, using the unique technology of kit drugs, orally disintegrating tablets andtransdermal absorption formulation. As for the generic medicines, we devote efforts to strengthen
direct-selling structure, actively promoting co-development and corporation with other companies. We
also promote the research and development in the areas including biosimilars, artificial blood and DDS(drug delivery system), entering oversea business expansion in the view.
In the Glass and Materials division, we continue to drive establishment and innovation in glassprocessing technologies and work on development and expansion of pharmaceutical container andlighting glass products. In addition, we will collaborate with medical equipment and pharmaceuticaldivisions in such field as pharmaceutical container, so as to actively develop the oversea business.
(4) Issues and Challenges that the Group Faces
In the domestic business of the Medical Equipment division, we will put effort into dialysis-related
products such as dialyzers, blood tubing sets, and dialysis machines, to react to the market needs
promptly, develop and market new products, improve product quality, strengthen sales capacity andincrease the market share and sales more.

-9-In the field of injection and infusion-related products, we will try to increase our market share focus onsafety-use product such as injection needle, syringes, infusion sets, butterfly needle and intra-vascularcatheter. In the filed of nutrition-related products as well, we try to develop new products meeting thedemands in the market and to promote sales activity and business development of nutrition-related
products.
As for the examination-related products, we will develop and market new products of blood glucose
monitoring device for diabetics and test reagents, strengthen sales of blood collection tubes for blood
test and obtain market share by active marketing. In the cardioangiology-related field, we will try to
expand the range of merchandise by active development and introduction of new products ofvascular-related product, oxygenator and ventricular assist device, so as to promote the businessdevelopment and expansion of sales forces in aim to increase the shares in market. Furthermore, wewill aggressively promote to introduce products related to such new field as regenerative medicine,induced Pluripotent Stem cell and Embryo-Stem cell.
In the international business, on the other hand, we will continuously promote to enrich sales bases
and to push forward cost reduction under trend of high-yen exchange rates. Especially for our main
product, dialyzer, we are going to promote the sales of dialyzers of synthetic membrane as well as
existing dialyzers of tri-acetate membrane. In diabetes related products, we will engage in developmentof products which are applicable for more security and accuracy improvement. In artificial heart-lung
related products, we will bring the improved and upgrade products to more and more expanding market
in order to develop the market. In the increasingly server market due to the influence of exchange rate
fluctuations, we are going to enhance the partnerships with foreign sales subsidiaries and cooperative
firms, in order to build a solid business foundation adaptable to progressing appreciation of the yen andto promote sales activities.
In the pharmaceutical division, we are eager to expand the range of generic products.
As for injection drug, we are to provide high-quality drugs mainly such distinctive products as“liquid-and-powder” double-bag kits of antibiotics, pre-filled syringes and injectables inplastic-ampoules.
In terms of oral drugs, we will increase item numbers largely and promote co-developments with othercompanies to enhance efficiency in product development and reinforcement of contract manufacturing.
We will also continuously develop the products of new drug type, for instance, drugs with prominent
easiness to drink. In production, we will expand contract manufacturing and establish production
system of high quality generic drug by launching a new plant and a packing plant built in last year forcontract manufacturing of oral drug. In the field of external application drugs centering transdermal
therapeutic drugs, which has been newly added to our business portfolio, we will proactively proceedboth of self-development and co-development as well as reinforce contract manufacturing. In addition,
we will make efforts for early realization of products such as infusion of nutrient, electrolyte infusion,
pharmaceutical products in biosimilar drug of recombinant erythropoietin, artificial blood, and Drug
Delivery System (DDS), while actively developing injection drugs including kit products and oral drugs.
Then, we will endeavor to enrich distinctive product line up from the user point of view, and expand ourpharmaceutical business by enlarging contract manufacturing including research of pharmaceuticalpreparation and selling routes, to enhance productivity in manufacturing factories.
In the Glass and Materials division, we will continue to drive innovate glass processing technologies
applying to demands by the pharmaceutical industry, developing mainly glass tubes as well as new
materials actively to expand our sales.
In terms of the glass for lighting purposes, we will strive to increase profits of glass materials for
Liquid Cristal Display (LCD) backlights and glass-related products in the expanding LCD panel market
like Chinese market.

- 10 -

Consolidated Balance Sheets
Previous Period(as of March. 31, 2008)(Unit: Millions of yen)
Current Period(as of March 31, 2009)(ASSETS)
Current Assets

162,746

160,865

49,46949,20053,50750,947

34,120
4,810
9,146
2,902
9,264
(473)

35,759
6,410
8,944
2,846
7,167
(410)

186,555

169,775

118,811

126,739

45,414

49,13137,78019,412
11,2204,983

36,524
19,45981
16,847
4,694

3,163

2,448

1,425
1,737

851
1,597

64,58040,587

Investment securities
Long-term loans receivable
Deferred tax assets
Lease deposits
Other assets

59,925
223
159
4,466
2,779

36,869
140
4,229
2,561

Allowance for doubtful
accounts(2,972)(3,214)349,302330,640

Cash on hand and in banks
Trade notes and accounts
receivable
Merchandise and finishedproducts

Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful accounts

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

OthersIntangible fixed assets
Goodwill
OthersInvestments and other assets

Total Assets- 11 -

Consolidated Balance Sheets
Previous Period(as of March. 31, 2008)(Unit: Millions of yen)
Current Period(as of March 31, 2009)(LIABILITIES)Current liabilities

108,835

114,795

30,00843,23415,150
5,388
2,226
1,528

28,322
48,179
6,140
72
4,437
2,281
1,615

75

3

1,954

1,954

Others

5,225
4,043

14,452
7,336

Fixed liabilities

120,923

119,284

36,30035,16014,00056,405
9,833

14,00065,012
92
913

2,128

1,888

Allowance for loss on lawsuit
Other fixed liabilities

700
170
1,385

631
170
1,416

Total liabilities

229,758

234,080

Shareholders’ Equity

97,32099,244

CapitalCapital surplus
Earned surplus
Treasury stock

28,66329,97539,476(794)

28,66329,97341,457(849)

20,835(4,195)

18,947

4,998

1,887

(9,193)

1,388

1,511

Total Net Assets

119,544

96,560Total Liabilities and Net Assets

349,302330,640

Trade notes and accounts
payableShort-term borrowings
Current portion of bonds
Lease obligation
Other payables
Accrued income taxes
Allowance for bonuses payable
Allowance for bonuses payablefor directors and corporate
auditors
Allowance for loss on clearance ofbusiness
Notes payable for plant andequipment

Bonds
Convertible type bonds with stockacquisition rights

Long-term borrowings
Lease obligation
Deferred tax liabilities
Accrued pension and severance
cost
Accrued severance indemnity fordirectors and corporate auditors(Net Assets)

Valuation and translation difference
Valuation differences of othersecurities
Foreign currency translation
adjustments

Minority interests- 12 -

Consolidated Statements of Income(Unit: Millions of yen)
Current Period

Previous Period(From April 1, 2007
To March 31, 2008)(From April 1, 2008
To March 31, 2009)

Net sales
Cost of goods sold172,113
123,108

175,944
124,395

Gross profit

49,00451,54935,327

36,774

13,677

14,775
1,820
438
740
88
554
6,705
2,376
358
3,745
224
9,890
1,663
279
269
727
200
187
2,174
292
163
269
538
253
269

Selling, general and administrative
expenses

Operating income
Non-operating income
Interest income
Dividend income
Equity in profit of affiliate
OthersNon-operating expenses
Interest expenses
Depreciation
Exchange loss
OthersRecurring income
Extraordinary gains

1,805
462
637
15
689
5,813
1,950
384
3,168
309
9,669
2,371
52
191
1,859

Gain on sale of fixed assets

Life insurance income
Governmental subsidies received
Adjustments to the prior year’s results

86
181
3,780
529
138
167
1,842

Settlement received

OthersExtraordinary losses
Loss on disposal of fixed assets
Impairment loss on fixed assets
Loss on disposal of inventories
Abnormal manufacturing cost
Loss on revaluation of inventories
Advanced depreciation on fixed assets

Allowance for accrued severance indemnityfor directors and corporate auditors in prior years

51

640
461

336

Net income before adjustment of taxes

8,260

9,379

Corporate, inhabitants andenterprise taxes
Adjustment for deferred taxes

3,758
36

4,037

11

182

4,454

4,530

OthersMinority shareholders’ share in net
income of consolidated subsidiaries

Net income- 13 -

629

Consolidated Statement of Shareholders’ Equity
Previous Period(From April 1, 2007
To March 31, 2008)

Shareholder’s equity
CapitalBalance at beginning of year
Balance at end of year
Capital Surplus
Balance at beginning of year
Increase(decrease) during the period
disposal of treasury stock
Net increase(decrease) during the period

Balance at end of year
Earned surplus
Balance at beginning of year
Increase(decrease) during the period
Dividend of surplus
Net income
Change of scope of consolidation
Net increase(decrease) during the period

Balance at end of year
Treasury stock
Balance at beginning of year
Increase(decrease) during the period
Acquisition of treasury stock
Disposal of treasury stock
Net increase(decrease) during the period

Balance at end of year
Total Shareholders’ equity
Balance at beginning of year
Increase(decrease) during the period
Dividend of surplus
Net income
Acquisition of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Net increase(decrease) during the period

Balance at end of year

- 14 -(Unit: Millions of yen)
Current Period(From April 1, 2008
To March 31, 2009)

28,663
28,663

28,663
28,66329,97329,9752
2
29,975(2)(2)
29,97339,14839,476(4,126)4,454
327
39,476(2,633)
4,530
83
1,981
41,457

(741)

(794)

(64)
10
(53)
(794)

(73)
18
(54)
(849)

97,044

97,320(4,126)
4,454
(64)
13
276
97,320(2,633)
4,530
(73)
15
83
1,923
99,244

Previous Period(Unit: Millions of yen)
Current Period(From April 1, 2007
To March 31, 2008)(From April 1, 2008
To March 31, 2009)

Valuation and translation differences
Valuation differences of other securities
Balance at beginning of year
Increase(decrease) during the period
Net increase(decrease) of the items otherthan shareholders’ equity during the period
Net increase(decrease) during the period

Balance at end of year
Foreign currency translation differences
Balance at beginning of year
Increase(decrease) during the period
Net increase(decrease) of the items otherthan shareholders’ equity during the period
Net increase(decrease) during the period

Balance at end of year
Total valuation and translation differences
Balance at beginning of year
Increase(decrease) during the period
Net increase(decrease) of the items otherthan shareholders’ equity during the period
Net increase(decrease) during the period

Balance at end of year
Minority interests
Balance at beginning of year
Increase(decrease) during the period
Net increase(decrease) of the items otherthan shareholders’ equity during the period
Net increase(decrease) during the period

Balance at end of year
Total net assets
Balance at beginning of year
Increase(decrease) during the period
Dividend of surplus
Net income
Acquisition of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Net increase(decrease) of the items otherthan shareholders’ equity during theperiodNet increase(decrease) during the period

Balance at end of year

- 15 -

29,883

18,947(10,935)(13,949)(10,935)
18,947(13,949)
4,998(1,276)

1,887

3,164

(11,080)

3,164
1,887

(11,080)(9,193)28,606

20,835(7,771)(25,030)(7,771)
20,835(25,030)(4,195)

1,369

1,388

19

122

19
1,388

122
1,511

127,020

119,544(4,126)
4,454
(64)
13
-

(2,633)
4,530
(73)
15
83

(7,752)(24,907)(7,476)
119,544(22,983)
96,560Consolidated Statements of Cash Flows(Unit: Millions of yen)Previous Period(From April 1, 2007
To March 31, 2008)
Cash flows from operating activities
Net income before adjustment for taxes
Depreciation and amortization
Impairment loss on fixed assets
Amortization of goodwill
Equity in loss (gain) 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

Other non-operating income/expenses and extraordinary 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
Payments for acquisition of shares with change in scope of consolidated subsidiary
Payments for acquisition of fixed assets
Proceeds from sales of fixed assets
Proceeds from governmental subsidies forinvestment in property and equipment
Increase(decrease) in short-term lending
Collections of loans receivable
Expenditures for other investments
Revenues from other investments
Cash flows from investing activities

Current Period(From April 1, 2008
To March 31, 2009)

8,260
15,054
263
(15)
(75)
(1,100)
1,950
286
2,608
(6,650)(464)
753(1,367)464
19,9701,094(1,889)1,036(398)(10,137)
9,675

9,379
18,109
163
374
(88)
351
(1,178)2,376
2,037(2,527)(6,539)
1,556
(528)
525
(405)
23,606
1,041(2,784)732(222)(3,521)
18,851(2,242)
2,246(1,015)(3,125)(25,180)
187(4,238)2,055(374)(20,856)
389

-

1,838

(1,029)94(40)
33(30,072)

(49)
48
(0)
1
(21,186)(2,787)
33,775(24,325)
19,880(60)

2,266
27,300(15,881)
4,979(15,150)

3

9

(51)
(32)
(4,120)(14)
22,267(323)
1,547
46,10947,656(59)(46)(2,631)(0)786(1,566)(3,114)47,656809
45,352

Cash flows from financing activities

Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of bonds
Payments for redemption of bonds
Proceeds from stock issuance to minority
shareholders
Decrease(Increase) in treasury stock

Repayments of finance lease obligations
Payments for dividends
Other payments
Cash flows from financing activities

Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents

Balance of cash and cash equivalents at the beginning of the period
Increase in cash and cash equivalents due to inclusion of new subsidiary in consolidation

Balance of cash and cash equivalents at the end of the period- 16 -

(5) Notes related to going concern
N/A(6) Basis of Preparation for the Consolidated Financial Statements
1 ) Scope of Consolidation[1] Consolidated subsidiaries: 25
Name of representative consolidated subsidiaries.
・・・・

Nipro Medical Industries, Ltd.
Nipro Europe N.V.
Nipro Pharma Corporation
Nipro Patch Co.,Ltd.

・ Nipro (Thailand) Corporation Ltd.
・ Nipro Medical Corporation
・ Tohoku Nipro Pharmaceutical Corporation

We have included Nipro Trading (Shanghai) Co. Ltd. in the scope of consolidation from thecurrent period due to the growth of its importance.
In addition, Shinwa Shoji Co., Ltd. ceased to exist as of August 1, 2008 as a result of the merger
with the Company.
Nipro Patch CO, .LTD altered the corporate name from “Saitama Daiichi Pharmaceutical Co., Ltd.
on July 1st, 2008.
[2] Unconsolidated subsidiaries: 3
The unconsolidated subsidiaries, Nissho Insurance Services Co., Ltd., Nipro Hospital Product,
Inc. and Wasyu Kogyo 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 theconsolidated financial statements.
2 ) Application of Equity Method
Number of affiliate accounted for by the equity method: 1

Bipha Corporation

Number of affiliate not accounted for by the equity method: 1
Cell Science & Technology Institute, Inc.
The equity method is not applied to the 3 unconsolidated subsidiaries and 1 affiliate company,
since they are not material to the consolidated net income and earned surplus etc., either individuallyor in the aggregate.
3 ) Accounting Period of Consolidated Subsidiaries
Among the consolidated subsidiaries, accounts closing date of the foreign subsidiary is
December 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
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
Inventories
Valued at cost by the weighted average method (Writing down method below cost to the
net selling value for decreased profitability)- 17 -

[2] Method of depreciation and amortization for significant depreciable assets
Tangible fixed assets: ······Declining-balance method(Excluding lease assets)
However, buildings acquired after April 1, 1998 (excluding
attached structures), are depreciated by straight-line method.
The foreign subsidiaries use straight-line method in
accordance with the tax laws of their countries.
[3] Method of treating significant deferred asset
Bond issue cost:
Record in full as expenses on expenditure[4] Standards for recognition of significant 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 collectability.
Allowance for bonuses
payables ···························· 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.
Allowance for bonuses
payables for directors
and corporate auditors ········ In order to cover the payment of bonuses to directors andcorporate auditors, an allowance is provided for the estimatedamount of bonuses to be paid, prorated for the consolidated
accounting period.
Allowance for loss on
clearance of business ········ In connection with withdrawal from retail business which we soldthe shares of the consolidated subsidiaries, the estimated loss at
the end of the consolidated accounting period is posted for
disposal of land, building and other properties to be soldaccordingly.
Accrued pension andseverance cost ···················· An allowance is provided for employee’s pension andseverance payments based on the estimated amounts ofprojected benefit obligation and plan assets at the end of theconsolidated accounting period.
Past service liabilities are expenses mainly for five years using
the straight line method.
Actuarial difference is expensed in the following consolidated
accounting period after the year of such recognition, using thestraight-line method for five years.
Accrued severance
indemnity for directors
and corporate auditors········· An allowance is provided for severance indemnity for directors
and corporate directors based on the amounts to be paid at theend of the consolidated accounting period.
Allowance for loss on
lawsuit.................................. In order to cover the probable losses on lawsuit, an allowance
for loss is provided for the estimated amount acceptable asneeded.
[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 Net Assets section.
[6] Other significant basis on preparation for consolidated financial statements
Consumption taxes
Consumption taxes are excluded from revenues and expenses accounts.
- 18 -

5 ) Evaluation of assets and liabilities of the consolidated subsidiaries
Partial fair market value method is used for valuation of assets and liabilities of consolidated
subsidiaries.
6 ) Amortization of goodwill
Goodwill is amortized using the straight-line method for five years.
7 ) 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.
(7) Change in significant matter of basis of preparation for consolidated financial statements(Change in Accounting Method)
1) Standards for measurement of inventories
We have adopted the “Accounting standards for measurement of inventories”(ASBJ, Statement
No.9, issued on July 5, 2006) from the current consolidated accounting period and the basis ofmeasurement has been mainly changed to writing down method below cost to the net selling value fordecreased profitability. As a result, gross profit, operating income and ordinary income, increased 10
million yen and income before income taxes and minority interests decreased 242 million yen,
comparing with the computation by the previous method.
As for the affection to the segment information, please see the notes in the segment information.
2) Practical solution on unification of accounting policies applied to foreign subsidiaries forconsolidated financial statements
We have adopted the “Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No. 18) fromthe current consolidated accounting period to make necessary adjustments on consolidation closing
process. As a result, gross profit increased 220 million yen, operating income increased 217 million
yen, ordinary income increased 88 million yen and income before income taxes and minority interests
increased 765 million yen.
As for the affection to the segment information, please see the notes in the segment information.
3) Standards for lease transaction
We have adopted the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13,
issued on June 7, 1993, ultimate revision on March 30, 2007) and the “Guidance on AccountingStandard for Lease Transactions” (ASBJ Guidance No.16, issued on January 18, 1994, ultimate
revision on March 30, 2007) from the current consolidated accounting period to change the treatmentof finance lease transaction that does not transfer ownership from the one similar to an ordinary
rental transaction to the one similar to ordinary sale and purchase transaction, to be an assets underfinance lease.
As for the method of depreciation of the assets under finance lease, its useful lives are equals tothe lease term and the residual values are equal to zero.
However, we still have adopted the similar manner to an ordinary rental transaction for the financelease transactions that do not transfer ownership and the starting dates of the lease transactions
were before 31 March 2008. No affection against profit and loss will be given by the change.
(Additional information)
Change in useful life of tangible fixed assets
Nipro Corporation and its domestic subsidiary companies have changed the useful lives ofmachinery from the current consolidated accounting period according to the revision of the domestic
corporate income tax law (Law for revision of a part of income tax law and related law, published on
April 30, 2008, the enforcement ordinance no.23). As a result, gross profit decreased 1,726 million
yen and operating income decreased 1,725 million yen, ordinary income and income before income
taxes and minority interests decreased 1,691 million yen respectively, comparing with thecomputation by the previous useful lives.
As for the affection to the segment information, please see the notes in the segment information.
- 19 -

(8) Notes to the consolidated financial statements(Notes to the Consolidated Statements of Income)(Previous period)

mil.yen(Current Period)1) Accumulated depreciation of tangible fixed assets

132,145

141,524

2) Pledged assets

12,021

15,3173) Obligations under guarantee contracts

548

53

4) Discounted notes receivable

217

32

mil.yen5) Accounts related to unconsolidated subsidiaries and affiliate companies
Investment securities (stock)

3,208

Investments other than stock83

mil.yen3,477

mil.yen-(Notes to the Consolidated Statements of Income)1) Research and development expenditure included in selling
general and administrative expenses and manufacturing cost.

(Previous period)
6,194 mil yen(Current period)
5,351mil yen

2) Loss on impairment of fixed assets
Use

Type of Asset

Location

Idle Assets

Buildings and Machinery etc.

3 places in Gunma Pref. etc.

Assets for Common Use

Buildings and Land

1 place in Akita Pref.
Total

Impairment loss
(Millions of Yen)
149
13
163

The fixed assets of the Company and its consolidated subsidiaries are categorized into the groups of assets forbusiness use, leased assets, idle assets, and assets for common use. The assets for business use are divided into
groups based on the business segment of management accounting, where as leased assets and idle assets are
categorized individually. Headquarters assets, R&D facilities, dormitories and company-offered houses are
categorized into assets for common use, since these assets can not generate identifiable cash flows.
The carrying amounts of assets groups whose land had significantly depreciated, or which incurred consecutive
operating loss, were reduced to the recoverable amounts, and such deducted amounts were recorded as loss on
impairment of fixed assets (163 million yen) under extraordinary loss. The impairment loss consisted of a loss onbuilding of 103 million yen, on structures of 1 million yen, on machinery and equipment of 48 million yen, on vehicles
of 0 million yen, on tools and equipments 1 million yen, on land 4 million yen, and on construction in progress of 3
million yen,
The recoverable amount of such asset groups was measured 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 theimmaterial assets. The assets groups which were difficult to sell or which could not be used for other purpose,
however, were evaluated as a memorandum value.

- 20 -

(Notes to the Consolidated Statement of Shareholders’ equity)
Previous period (From April 1, 2007 to March 31, 2008)
1. Sort and total numbers of Shared issues
Sort of shares
Common stock

Number of shares
As of March 31, 2007
63,878,505

Increased
numbers

Decreased
numbers--

Number of shares
As of March 31, 2008
63,878,505

2. Sort and numbers of Treasury stock
Sort of shares
Common stock

Number of shares
As of March 31, 2007
393,067

Increased
numbers
27,665Decreased
numbers
5,685

Number of shares
As of March 31, 2008
415,037(Note) 1. The increased numbers are of purchase of shares which number is less than unit amount.
2. The decreased numbers are of selling of shares which number is less than unit amount.
3. Dividends(1) Amount of dividends paid
Decision

Sort of shares

June 27, 2007 at ordinary
general shareholders’ meeting

Common stock

November 19, 2007 at board of
directors meeting

Common stock

Total amount ofdividends paid

Million of yen
2,348
Million of yen
1,777

Dividends
per shares
Yen
37.00
Yen
28.00

Basis date

Effective date

March 31, 2007

June 28, 2007

September 30, 2007

December 10, 2007

(2) Dividends of basis date belonging to the consolidated accounting period to its effective date be in thenext consolidated accounting period.
Decision

Sort ofsharesProceeds ofdividends

Total amount ofdividends paid

Dividends
per shares

June 26, 2008 at
ordinary
generalshareholders’ meeting

Commonstock

EarnedsurplusMillion of yen
602

Yen
9.50

- 21 -

Basis date

Effective date

March 31, 2008

June 27, 2008

Current period (From April 1, 2008 to March 31, 2009)
1. Sort and total numbers of Shared issues
Sort of shares
Common stock

Number of shares
As of March 31, 2008
63,878,505

Increased
numbers

Decreased
numbers--

Number of shares
As of March 31, 2009
63,878,505

Increased
numbers
42,395Decreased
numbers
9,558

Number of shares
As of March 31, 2009
447,874

2. Sort and numbers of Treasury stock
Sort of shares
Common stock

Number of shares
As of March 31, 2008
415,037(Note) 1. The increased numbers are of purchase of shares whose number is less than unit
amount.
2. The decreased numbers are of selling of shares whose number is less than unit amount.
3. Dividends(1) Amount of dividends paid
Decision

Sort of shares

June 26, 2008 at ordinary
general shareholders’ meeting

Common stock

November 11, 2008 at board of
directors meeting

Common stock

Total amount ofdividends paid

Million of yen
602
Million of yen
2,030

Dividends
per shares
Yen
9.50
Yen
32.00

Basis date

Effective date

March 31, 2008

June 27, 2008

September 30, 2008

December 8, 2008

(2) Dividends of basis date belonging to the consolidated accounting period to its effective date be in thenext consolidated accounting period.
N/A(Related Party Transactions)
N/A(Derivative Transactions)
N/A(Stock Options)
N/A- 22 -

(Business combinations, etc.)
Transactions under common control
1 Name and description of business of the combined entity, the legal form of businesscombination, the name of entity after reorganization and outline and purpose of the transaction.
(1) Combined entity
1 Acquirer
2 Acquired company

NIPRO CORPORATION
Shinwa Shoji Co., Ltd.

(2) Description of business
Manufacture and sale of glass products(3) Legal form of business combination
Merger by absorption, existing company is the Company and Shinwa Shoji Co.,
Ltd. ceases to exist(4) Name of entity after the reorganization
NIPRO CORPORATION(5) Outline of the transaction including its purpose
1 Purpose of merger
Shinwa Shoji Co., Ltd., a wholly-owned subsidiary of the Company, acted asa production and sales base of glass materials in Eastern Japan. In order toraise business efficiency, cut costs and achieve production rationalization, it
merged with the Company because it became inefficient to act as a separate
company, while diminishing its role in the groups and decreasing profitability
due to the changes in the main market of small electric bulb.
2 Date of merger
August 1, 20082

Summary of accounting treatment
Because this merger is the case of transactions under common control, based on“Accounting standards for Business Combining”(ASBJ, issued on October 31, 2003) and“Guidance on Accounting Standards for Business Combining and Accounting Standard forBusiness Divestitures” (ASBJ Guidance No.10, ultimate revision on November 15, 2007), alltransaction were eliminated as inter-company transactions deal.

- 23 -

(Segment information)
1. Segment information by business category(1) Previous period (From April 1, 2007 to March 31, 2008)(Millions of yen)

MedicalEquipment

Pharmaceutical

Glass &
Materials(1) Sales to third parties

111,084

48,753

11,437837

172,113-

172,113(2) Inter-segment sales
and transfers

-

0

3,166

75

3,241

(3,241)-

Total

111,084

48,753

14,603912

175,354(3,241)

172,113

Operating expenses

95,25345,482

12,713

899

154,349

4,086

158,435

Operating income

15,830

3,270

1,890

13

21,004(7,327)

13,677

133,580

93,142

12,326

5,701

244,751

104,551

349,302

Depreciation

7,057

6,612

471

80

14,222832

15,054

Capital expenditures

16,419

8,351

386

58

25,216684

25,900

Other

Total

Eliminations/Corporate

Consolidated

1. Net sales andoperating income
Net sales

2. Assets, depreciationand capital expenditures

Assets(2) Current period (From April 1, 2008 to March 31, 2009)(Millions of yen)

MedicalEquipment

Pharmaceutical

Glass &
Materials(1) Sales to third parties

112,969

52,725

9,553

695

175,944-

175,944(2) Inter-segment sales
and transfers

-

0

3,389

89

3,479

(3,479)-Total

112,969

52,726

12,943785

179,424(3,479)

175,944

Operating expenses

96,761

48,643

11,170781

157,356

3,812

161,169

Operating income

16,208

4,082

1,772

4

22,067(7,292)

14,775

2. Assets, depreciation,
impairment loss and capital
expenditures

120,447

111,202

10,8006,106

248,556

82,084

330,640

9,719

6,963

445

88

17,217891

18,109

13

18

130

－

163

－

163

11,515

20,632

134

68

32,035791

33,141

Other

Total

Eliminations/Corporate

Consolidated

1. Net sales andoperating income
Net sales

AssetsDepreciation
Impairment loss
fixed assetsofCapital expenditures- 24 -

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 category 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.

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 7,327 million yen and 7,292 million
yen, respectively. The unallocated corporate costs consisted primarily of the parent company’s
research and development costs and headquarters administration costs.
3. As described in “Changes in accounting method” 1), we have adopted “Accounting
standards for measurement of inventories”, and the basis of measurement has been changed
to writing down method below cost to the net selling value for decreased profitability. As aresult, operating expenses in Medical Equipment segment is supposed to be increasing 7
million yen and that in Pharmaceutical segment is supposed to be decreasing 18 million yen,while operating income in Medical Equipment and pharmaceutical segments are supposed to
be increased and decreased equivalently, comparing with the incomes calculated according toprevious method.
4.

As described in “Changes in accounting method” 2), we have adopted the “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” from the current consolidated accounting period to make necessary adjustmentson consolidation. As a result, operating expenses in Medical Equipment segment decreased
217 million yen, and operating incomes are supposed to increase equivalently, comparing with
the incomes calculated according to previous method.

5.

As described in “Additional information”, the Company and its domestic subsidiary companies
have changed the useful lives of machinery from the current consolidated accounting period
according to the revision of corporate income tax law. As a result, operating expenses in Medical
Equipment, Glass & Materials, Others and Eliminations/Corporate segments are supposed to be
increased 2,055 million yen, 41 million yen, 1 million yen and 0 million yen respectively and thatin Pharmaceutical segment decreased 374 million yen, while operating incomes in Medical
Equipment, Glass & Materials and Others and Eliminations/Corporate segments are supposed to
be decreased and that in pharmaceutical segment increased equivalently.
6. Assets of “Eliminations/Corporate” for the previous and current consolidated accounting
periods included corporate assets of 104,740 million yen and 82,340 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.
7. Depreciation and capital expenditures included long-term prepaid expenses and its
amortization.

- 25 -

2. Segment information by geographical area
(1) Previous period (From April 1, 2007 to March 31, 2008)
Japan

America(Millions of yen)
Asia

EuropeTotal

Eliminations/Corporate

Consolidated

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

135,609

20,909

9,173

6,421

172,113-

172,113(2) Inter-segment sales
and transfers

26,4161,137

913,95441,517(41,517)-

Total

162,025

22,046

9,183

20,375

213,630(41,517)

172,113

Operating expenses

139,984

23,712

8,973

19,423

192,093(33,658)

158,435

Operating income (loss)

22,041(1,666)

209

952

21,536(7,859)13,677

241,543

8,661

4,565

9,585

264,355

84,946349,302

2. Assets(2) Current period (From April 1, 2008 to March 31, 2009)
Japan

America(Millions of yen)
Asia

EuropeTotal

Eliminations/Corporate

Consolidated

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

134,330

21,306

12,432

7,875

175,944-

175,944(2) Inter-segment sales
and transfers

30,207822

314,38145,415(45,415)-

Total

164,537

22,12912,43522,257221,359(45,415)

175,944

Operating expenses

144,026

22,721

12,467

20,847200,063(38,894)

161,169

Operating income (loss)

20,510

(591)

(32)

1,409

21,296(6,520)14,775

256,811

3,025

5,081

6,084

271,003

59,637

330,640

2. Assets

Notes: · 1.

Operating expenses of “Eliminations and Corporate” for the previous and current consolidated
accounting periods included unallocated corporate costs of 7,327 million yen and 7,292 million
yen, respectively. The unallocated corporate costs consisted primarily of the parent company’s
research and development costs and the headquarters administration costs.

2.

As described in “Changes in accounting method” 1), we have adopted “Accounting
standards for measurement of inventories”, and the basis of measurement has been changed
to writing down method below cost to the net selling value for decreased profitability. As aresult, operating expenses in Japan segment are supposed to be decreased 10 million yen,and operating incomes are supposed to be increased equivalently.

3.

As described in “Changes in accounting method” 2), we have adopted the “Practical
Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements” from the current consolidated accounting period to make necessary
adjustments on consolidation. As a result, operating expenses in America and Asia segments
are supposed to be decreased 228 million yen and be increased 10 million yen respectively,
while operating incomes in America segment is to be equivalently increased and in Asia
segment decreased, respectively.

- 26 -

4.

As described in “Additional information”, the Company and its domestic subsidiary companies
have changed the useful lives of machinery from the current consolidated accounting period
according to the revision of corporate income tax law. As a result, operating expenses in Japanand Eliminations/Corporate segment are supposed to be increased 1,724 million yen and 0
million yen respectively, while the operating costs are supposed to be respectively decreased.

5.

Assets of “Eliminations/Corporate” for the previous and current consolidated accounting
periods included corporate assets of 104,740 million yen and 82,340 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.

6.

Classification of countries or areas is based on geographical proximity.

7.

The major countries included in each geographical area are as follows:
America……..
The United States of America and Brazil
Europe………
Belgium
Asia………….
China, Thailand and Singapore

3. Overseas sales(1) Previous period (From April 1, 2007 to March 31, 2008)

1. Overseas sales(Millions of yen)

America

Europe

Asia

Total

35,687

19,14010,284

65,112

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

172,113
20.7%

11.1%

6.0

(2) Current period (From April 1, 2008 to March 31, 2009)
America
1. Overseas sales(Millions of yen)

Europe33,291

19,990

Asia

Total

10,666

63,948

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

Notes:

1.
2.
3.

37.8%

175,944
18.9％

11.4％

6.1％

36.4％

Overseas sales represent those of the Company and the consolidated subsidiaries tocountries and areas outside of Japan.
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, India, Indonesia, Taiwan and Thailand- 27 -

(Lease Transactions)1) Finance lease transactions (borrower)
Lease Assets related to the finance lease transaction that does not transfer ownership
Contents of Lease Assets
Tangible Lease Assets
Mainly, host computer and server (Tools, materials and equipment) at thecompany
The method of depreciation of the assets under finance lease
Straight-line method its useful lives are equals to the lease term and theresidual values are equal to zero2) We still have adopted the similar manner to an ordinary rental transaction for the finance leasetransactions that do not transfer ownership and the starting dates of the lease transactions were
before 31 March 2008, as follows:

Previous period

Current period

Acquisition cost equivalent
Accumulated depreciation equivalentBook value equivalent

2,694 mil. yen
1,883
810

1,659 mil. yen
1,112
546

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

525 mil. yen
656
1,181

290 mil. yen
439
730

605 mil. yen
561 mil. yen
46 mil. yen

783 mil. yen
494 mil. yen
38 mil. yen

Lease payments
Depreciation equivalentInterest expense equivalent

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.

- 28 -(Tax-effect accounting)
1. Major components of deferred tax assets and liabilities
Previous period(as of March 31, 2008)
Deferred tax assets (current)
Elimination of unrealized profits
Accrued enterprise tax
Allowances for bonus payables
Allowances for loss on clearance of businessAccounts receivable
Inventory assets
Allowance for doubtful accounts
Tax loss carryforwards
OthersSubtotal
Allowance accountGross deferred tax assets (current)
Offset with deferred tax liabilities (current)
Net deferred tax assets (current)

Current period(as of March 31, 2009)

986
170
621
791
196
49
164
46
160
3,187
(273)
2,914
(12)
2,902

mil. yen

690
202
653
791
187
186
29
259
211
3,211
(353)
2,857
(10)
2,846

mil. yen

11
0
12
(12)
-

mil. yen

10
10
(10)
-

mil. yen

Deferred tax assets (fixed)
Impairment loss of fixed assets
Valuation difference of land
Allowance for doubtful accounts
Accrued pension and severance costAccrued severance indemnity for directors and corporate auditors
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)

846
149
1,011
837
284
117
3,133
168
6,548
(3,210)3,337(3,178)159

mil. yen

882
122
1,148
743
255
117
3,215
178
6,665
(3,918)2,746(2,605)140

mil. yen

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)

12,94170
13,011(3,178)
9,833

mil. yen

3,422
89
3,512
(2,599)913

mil. yen

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

2. Reconciliation of the difference between statutory tax rate and effective tax rate after adoption of tax-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
Tax credits on research and development expenses, etc.
Utilization of tax loss carryforwards
Allowed loss on devaluation of consolidated subsidiaries’ stock
Allowance account
Others
Effective tax rate after adoption of tax-effect accounting- 29 -

Previous period(as of March 31, 2008)40.5 %
2.9
(1.4)
10.9
1.3
(5.1)
(2.0)
0.1
(1.3)
45.9

Current period(as of March 31, 2009)40.5 %
1.8
(1.4)
13.9
1.1
(5.0)
(0.3)
(4.9)
5.7
(1.6)
49.8

(Securities)
1) Other securities with market quotations(Unit: Millions of yen)
Current period(as of March 31, 2009)

Previous period(as of March 31, 2008)
Acquisition
cost

Carrying
value onconsolidated
B/S

Difference

Acquisition
cost

Carrying
value onconsolidated
B/S

Difference

Stock
Bonds
Others22,937-54,240-31,302-

6,944-

18,223-

11,278-Subtotal

22,93754,24031,302

6,944

18,223

11,278Stock
Bonds
Others

1,335
60

1,043
59

(291)
(1)

17,25560

13,54639(3,709)(21)

Subtotal

1,395

1,103

(292)

17,315

13,585(3,730)

Total

24,33355,34331,01024,26031,808

7,548

Classification

Securities whose carrying value
exceeds their acquisition cost

Securities whose carrying value donot exceed their acquisition cost

(Note)“Acquisition cost” in the table is impaired book price.
We accounted for 75 million yen as impairment loss in Stock in other securities with market
quotations for 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(Unit: Millions of yen)
Current period(From April 1, 2008
To March 31, 2009)

Previous period(From April 1, 2007
To March 31, 2008)
Sales
proceeds

Total gains--

Total losses-

Sales
proceeds-

Total gains-

Total losses-

3. Securities that do not have market quotations(Unit: Millions of yen)Previous period(as of March 31, 2008)
Carrying value on
Consolidated Balance Sheet

Other securities
Unlisted stock
Bonds
Stocks of subsidiaries andaffiliates
Stocks of unconsolidated
subsidiaries
Stocks of affiliated companies
Total- 30 -

Current period(as of March 31, 2009)
Carrying value on
Consolidated Balance Sheet

1,173
10

1,384
10

192

213

3,205

3,453

4,581

5,061

(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, and certain domestic consolidated
subsidiaries have defined contribution plans.
Certain foreign subsidiaries also have defined benefit plans and defined contribution plans, etc.
2. Matters related to pension and severance liabilities
Previous period

Current period(as of March 31, 2008)(as of March 31,2009)(1) Pension and severance liabilities(8,876)(2) Pension plan assets

6,991

6,336

(3) Unfunded pension and severance liabilities (1)+(2)(1,884)(2,857)(4) Unrecognized actuarial differences

(173)

1,030

(5) Unrecognized past-service liabilities

(20)

(17)

(2,078)(1,845)5043(6) Net amount on the consolidated balance sheet (3)+(4)+(5)(7) Prepaid pension cost

mil.yen(9,194)

mil.yen(8) Accrued pension and severance cost(6)-(7)(2,128)(1,888)(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 actuarial differences(5) Amortization of past-service liabilities(6) Others (Contribution to defined contribution plan)(7) Others (Retirement allowance)(8) Others (Deferment pension and severance expense)(9) Pension and severance benefit expenses(1)+(2)+(3)+(4)+(5)+(6)+(7)+(8)Previous period

Current period(From April 1, 2007
To March 31, 2008)

From April 1, 2008)
To March 31, 2009)

586 mil. Yen
208
(123)
(262)
(3)
32
36
474

679mil. yen
219
(116)
(229)
(3)
35
48
634

(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 past-service liabilities(5) Amortization period of actuarial differences

Previous period(as of March 31, 2008)
Fixed base for period

Current period(as of March 31, 2009)
Fixed base for period

Mainly 2.5%
Mainly 1.5%
Mainly 5 years bystraight-line method

Mainly 2.5%
Mainly 1.5%
Mainly 5 years bystraight-line method

Mainly 5 years bystraight-line method from thefollowing accounting period
after the year of recognitionof difference

Mainly 5 years bystraight-line method from thefollowing accounting period
after the year of recognitionof difference- 31 -

(Per share information)

Previous period(From April 1, 2007
To March 31, 2008)

Current period(From April 1, 2008
To March 31, 2009)

Net assets per share

1,861.79 yen

1,498.47 yen

Earnings per share

70.17 yen
Diluted earning per shareis not presented because
there is no potential stock
which could have adilutive effect.

71.41yen
Diluted earning per shareis not presented because
there is no potential stock
which could have a dilutive
effect.

Previous period
As ofMarch 31, 2008

Current period
As ofMarch 31, 2009

119,544

96,560

Amount to be deducted from total net
assets in B/S (Million yen)
Minority interests

1,388

1,511

Net assets related to the common
stocks(million yen)

118,155

95,04963,87863,878415

447

63,46363,430Previous period(From April 1, 2007
To March 31, 2008)

Previous period(From April 1, 2008
To March 31, 2009)

4,454

4,530

-

-

Net income related to the common
stock (Million yen)

4,454

4,530

Average shares of the common stockduring the period (Thousands shares)

63,47263,447

Sort of potential shares:
Stock acquisition right
Number of potential
shares:2,800 units

Sort of potential shares:
Stock acquisition right
Number of potential
shares:2,800 units(Notes) Basis of computation
1. Net assets per share

Total net assets in B/S(million yen)

Common stocks issued(Thousands shares)
Treasury stocks of common stock(Thousands shares)
Number of common stocks(thousand
shares) utilized for computation of
net assets per share
2. Earnings per share

Net income(Million yen)Amount not attributed tocommon stock (Million yen)the

Overview of the potential shares notincluded in the computation ofdiluted earning share because of
not having a dilutive effect- 32 -

Balance Sheets
Previous Period(as of March 31, 2008)(Unit: Millions of yen)
Current Period(as of March 31, 2009)

121,234

125,11435,857
11,51839,92135,584
11,95240,27118,801
2,108
3,487
209
1,477

21,040
3,537
3,185
214
1,510

4,289
1,663
1,954

5,515
1,029
1,327

(56)

(55)

Fixed Assets

188,629

157,293

Tangible fixed assets

44,17641,807

13,624424
13,866
11
2,063
11,4302,755

13,827388
12,87910
1,782
11,526
72
1,318

342

318

274
68

248
69

Investments and other assets

144,109

115,168

Investment securities

52,91957,046

31,53155,936
11,515(ASSETS)
Current Assets
Cash on hand and in banks

Trade notes receivable
Accounts receivable
Merchandise and finishedproducts

Work in process
Raw materials and supplies
Prepaid expenses
Deferred tax assets
Short-term loan receivablesfrom subsidiaries
Other receivables
Other current assets
Allowance for doubtful
accounts

Buildings
Structures
Machinery
VehiclesTools and equipments
Land
Lease Assets
Construction in progress
Intangible fixed assets
Software
OthersStocks of related companies
Investments other than stock in
related companies

11,485
222－

Allowance for investment loss

20,355
1,210
4,259
732
(2,569)(1,553)

17,987
884
1,629
4,057
1,088
(2,925)(6,538)

Total Assets

309,863

282,408

Long-term loans receivable
Long-term loans receivable fromsubsidiaries

Long-term prepaid expenses
Deferred tax assets
Lease deposits
Other assets
Allowance for doubtful accounts- 33 -

Balance Sheets
Previous Period(as of March 31, 2008)(Unit: Millions of yen)
Current Period(as of March 31, 2009)(LIABILITIES)Current liabilities

83,58079,083

15,893
13,881
18,40011,49815,000
2,551
766
600
70
776
70
1,954
1,842
275

14,452
14,00521,00013,389
6,000
21
2,248
587
1,530
51
835
1,954
2,433
574

102,109

94,11836,00014,00041,576
7,529
1,095
488
170
1,249
185,690

35,00014,00042,184
54
883
563
170
1,262
173,201

107,608
28,66329,97529,972
3
49,764
1,196

105,458
28,66329,97329,972
1
47,672
1,196

16
41
-

Valuation differences of other securities

44,935
3,576(794)
16,564
16,56416
23
90
47,335
(989)
(849)
3,747
3,747

Total Net Assets

124,172

109,206

Total liabilities and net assets

309,863

282,408

Trade notes payable
Trade accounts payable
Short-term borrowings
Current portion of long-term borrowings
Current portion of bonds
Lease obligation
Other payables
Accrued expenses
Accrued income taxes
Amounts withheld for income taxes, etc.
Allowance for bonuses payables

Allowance for bonuses payables for directors and corporate auditors
Allowance for loss on clearance of businessNotes payable for plant and equipment
Other current liabilities

Fixed liabilities
Bonds
Convertible-bond-type bonds with stock acquisition rights
Long-term borrowings
Lease obligation
Deferred tax liabilities
Accrued pension and severance costAccrued severance indemnity for directors and corporate auditors

Allowance for loss on lawsuit
Lease deposits received
Total liabilities(Net Assets)
Shareholders’ equity
CapitalCapital surplus
Capital reserve
Other capital surplus
Earned surplus
Revenue reserve
Other revenue reserve
Reserve for dividends

Reserve for special depreciation
Reserve for advanced depreciation on fixed assets
General reserve
Retained earnings

Treasury stock
Valuation and translation difference- 34 -

Statements of Income(Unit: Millions of yen)
Current Period

Previous Period(From April 1, 2007
To March 31, 2008)(From April 1, 2008
To March 31, 2009)

Net sales
Cost of goods sold

135,035
101,889

Gross profit

33,145

Selling, general and administrative
expenses

20,872

135,256
104,144
31,111

Operating income

12,273

20,949
10,161Non-operating income

1,576
658
611
306
5,231
836
612
120
3,527
134
8,618

1,633
650
710
271
3,529
978
675
20
1,819
35
8,265

954
2
859

1,443
247
-

-

618
200

41

263
－

Interest income
Dividend income
OthersNon-operating expenses
Interest expenses
Interest on bonds
Issuance expense for bonds
Exchange loss
OthersRecurring income
Extraordinary gains
Gains on sales of fixed assets

Governmental subsidies
Reversal of allowance for loss on
investment in affiliated company

Settlement received
Gain on cancellation ofshares for absorption ofsubsidiary
Adjustments to the prior year’s results
Gain on compensation for loss

44
6
1,941
340
-

OthersExtraordinary losses
Loss on disposals of fixed assets
Impairment loss of fixed assets
Advanced depreciation on fixed assets

842-

Loss on devaluation of investment in affiliated companies
Allowance for investment loss
on affiliated companies
Allowance for accrued severance indemnity fordirectors and corporate auditors in prior years
Allowance for loss on lawsuit

114
7,002
100
13
－
1,142

-

5,603

471
170
44
72

51
90

Net income before income taxes
Corporate, inhabitants andenterprise taxes
Adjustment for deferred taxes

7,632

2,706

2,474
308

2,633
(467)

Net income

4,848

540

Abnormal manufacturing cost
Others- 35 -

(3) Statement of Shareholders’ Equity(Unit: Millions of yen)
Current Period

Previous Period(From April 1, 2007
To March 31, 2008)(From April 1, 2008
To March 31, 2009)

Shareholder’s equity
CapitalBalance at beginning of year
Balance at end of year
Capital Surplus
Capital reserve
Balance at beginning of year
Balance at end of year
Other Capital Surplus
Balance at beginning of year
Increase(decrease) during the period
Disposal of treasury stock
Net increase(decrease) during the period

Balance at end of year
Total capital surplus
Balance at beginning of year
Increase(decrease) during the period
Disposal of treasury stock
Net increase(decrease) during the period

Balance at end of year
Earned surplus
Earned reserve
Balance at beginning of year
Balance at end of year
Other earned reserve
Dividend reserve
Balance at beginning of year
Balance at end of year
Special depreciation reserve
Balance at beginning of year
Increase(decrease) during the period
Reversal of Special depreciation reserve
Net increase(decrease) during the period

Balance at end of year
Reserve for reduction in fixed assets
Balance at beginning of year
Increase(decrease) during the period
Provision of reserve for advanced depreciation
on fixed assets
Net increase(decrease) during the period

Balance at end of year
General reserve
Balance at beginning of year
Increase(decrease) during the period
Provision of general reserve
Net increase(decrease) during the period

Balance at beginning of year

- 36 -

28,663
28,663

28,663
28,66329,972
29,972

29,972
29,972

1

3

2
2
3

(2)
(2)
1

29,97329,9752
2
29,975(2)(2)
29,973

1,196
1,196

1,196
1,196

16
16

16
16

66

41

(25)
(25)
41

(17)
(17)
23

-

-

-

90

-

90
90

39,73544,9355,200
5,200
44,9352,400
2,400
47,335

(Unit: Millions of yen)
Current Period

Previous Period(From April 1, 2007
To March 31, 2008)

Earned surplus carried forward
Balance at beginning of year
Increase(decrease) during the period
Dividends of surplus
Net income(From April 1, 2008
To March 31, 2009)

8,028

3,576

(4,126)
4,848
25(5,200)(4,452)
3,576(2,633)540
17(90)(2,400)(4,565)(989)

49,042

49,764(4,126)
4,848-(2,633)
540
－

-

－

722
49,764－(2,092)47,672

(741)

(794)

(64)
10
(53)
(794)

(73)
18
(54)
(849)

106,937

107,608(4,126)
4,848
(64)
13
670
107,608(2,633)540(73)
15(2,149)105,458

26,83016,564

Increase(decrease) of the items otherthan shareholders’ equity during the period(10,266)(12,816)

Net increase(decrease) during the period(10,266)
16,564(12,816)
3,747

133,768

124,172(4,126)
4,848
(64)
13
(10,266)(2,633)540(73)
15(12,816)(9,595)
124,172(14,966)
109,206

Reversal of Special depreciation reserve
Provision of reserve for advanced depreciation
on fixed assets
Provision of general reserve
Net increase(decrease) during the period

Balance at end of year
Total earned surplus
Balance at beginning of the period
Increase(decrease) during the period
Dividends of surplus
Net income
Reversal of Special depreciation reserve
Provision of reserve for advanced depreciation
on fixed assets
Provision of general reserve
Net increase(decrease) during the period

Balance at end of year
Treasury stock
Balance at beginning of year
Increase(decrease) during the period
Acquisition of treasury stock
Disposal of treasury stock
Net increase(decrease) during the period

Balance at end of year
Total Shareholders’ equity
Balance at beginning of year
Increase(decrease) during the period
Dividends of surplus
Net income
Acquisition of treasury stock
Disposal of treasury stock
Net increase(decrease) during the period

Balance at end of year
Valuation and translation differences
Valuation differences of other securities
Balance at beginning of year
Increase(decrease) during the period

Balance at end of year
Total net assets
Balance at beginning of year
Increase(decrease) during the period
Dividends of surplus
Net income
Acquisition of treasury stock
Disposal of treasury stock
Increase(decrease) of the items otherthan shareholders’ equity during the period
Net increase(decrease) during the period

Balance at end of year

- 37 -

(4) Notes related to going concern
N/A(5) 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 (Writing down
method below cost to the net selling value for decreased
profitability)
Raw materials and supplies

Valued at cost by the first-in first-out method (Writing down
method below cost to the net selling value for decreased
profitability)

3) Method of depreciation and amortization for fixed assets
Tangible fixed assets: ·················Declining-balance method(Excluding lease assets)
However, buildings acquired after April 1, 1998 (excluding
attached structures), are depreciated by straight-line method.
Intangible fixed assets ················Straight-line method(Excluding lease assets)
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
Lease Assets
Lease assets under the finance lease transaction that does not transfer ownership
Recorded by straight-line method its useful lives are equals tothe lease term and the residual values are equal to zero
We still have adopted the similar manner to an ordinary rental
transaction for the finance lease transactions that do not transfer
ownership and the starting dates of the lease transactions were
before 31 March 2008.
4) Method of treating deferred asset
Bond issue cost:
Record in full as expenses on expenditure5) 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 collectability.
- 38 -

Allowance for investment
loss ································· In order to cover the probable losses on investment to theaffiliates, an allowance for loss is provided for the estimatedamount considering the business results and assets situation.
Allowance for bonuses
payables ························· 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 current accounting period.
Allowance for loss on clearance
Of business ····················· In connection from withdrawal from retail business which wesold the shares of the subsidiaries, the estimated loss at the endof the current accounting period is posted for disposal of land,building and other properties to be sold accordingly.
Accrued pension andseverance cost ················· An allowance is provided for employee’s pension andseverance payments based on the estimated amounts ofprojected benefit obligation and plan assets at the end of thecurrent accounting period.
Actuarial difference is expensed in the following accounting
period after the year of such recognition, using the straight-line
method for five years.
Accrued severance
indemnity for directors
and corporate auditors ..... An allowance is provided for severance indemnity for directors
and corporate auditors based on the amounts to be paid at theend of the current accounting period based on the internal
regulation of the company.
Allowance for loss on
lawsuit............................

In order to cover the probable losses on lawsuit, an allowance
for loss is provided for the estimated amount acceptable asneeded.

6) Other significant basis on preparation for financial statements
Consumption Taxes
Consumption taxes are excluded from revenues and expenses
accounts.
(6) Significant change in accounting method(Change in Accounting Method)
1) Standards for measurement of inventories
We have adopted the “Accounting standards for measurement of inventories” (ASBJ,
Statement No.9, issued on July 5, 2006) from current accounting period and the basis ofmeasurement has been changed to writing down method below cost to the net selling value fordecreased profitability. As a result, gross profit, operating income ordinary income and income before
income taxes and minority interests respectively decreased 7 million yen, comparing with thecomputation by the previous method.
2) Standards for lease transaction
We have adopted the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13,
issued on June 7, 1993, ultimate revision on March 30, 2007) and the “Guidance on AccountingStandard for Lease Transactions” (ASBJ Guidance No.16, issued on January 18, 1994, ultimate
revision on March 30, 2007) from the current accounting period to change the treatment of financelease transaction that does not transfer ownership from the one similar to an ordinary rental
transaction to the one similar to ordinary sale and purchase transaction, to be an assets underfinance lease.
As for the method of depreciation of the assets under finance lease, its useful lives are equals tothe lease term and the residual values are equal to zero.
However, we still have adopted the similar manner to an ordinary rental transaction for the financelease transactions that do not transfer ownership and the starting dates of the lease transactions
were before 31 March 2008. No affection against profit and loss will be given by the change.
- 39 -

(Additional information)
Change in useful life of tangible fixed assets
We have changed the useful lives of machinery from the current accounting period according to
the revision of the domestic corporate income tax law (Law for revision of a part of income tax law
and related law, published on April 30, 2008, the enforcement ordinance no.23). As a result, grossprofit decreased 1,776 million yen, and operating income, ordinary income and income before
income taxes and minority interests decreased 1,777 million yen respectively, comparing with thecomputation by the previous useful lives.
(7) Notes to the Financial Statements(Balance Sheet)(Previous period)(Current period)

1. Accumulated depreciation of tangible fixed assets

53,805 mil. yen

61,340 mil. yen

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

24,022 mil. yen
20,355
10,881

27,340 mil. yen
17,987
11,657

3. Pledged assets
Buildings
Land3,805 mil. yen
1,265

193 mil. yen
215

4. Obligations under guarantee contracts

7,495 mil. yen

11,761 mil. yen

18 mil. yen

18 mil. yen(Previous Period)(Current Period)

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

31,687 mil. yen
37,685217
638

32,983 mil. yen
39,513248
603

2. Research and development expenses included in
Selling, general and administrative expenses and manufacturing cost

4,234 mil. yen

4,050 mil. yen

5. Notes receivable discounted(Statement of Income)(Notes to the Statement of Shareholders’ equity)
Previous period (From April 1, 2007 to March 31, 2008)
Sort and numbers of Treasury stock
Sort of shares
Common stock

Number of shares
As of March 31, 2007
393,067

Increased numbers

Decreased numbers

27,655

5,685

Number of shares
As of March 31, 2008
415,037(Note) 1. The increased numbers are of purchase of shares which number is less than unit amount.
2. The decreased numbers are of selling of shares which number is less than unit amount.
Current period (From April 1, 2008 to March 31, 2009)
Sort and numbers of Treasury stock
Sort of shares
Common stock

Number of shares
As of March 31, 2008
415,037

Increased numbers

Decreased numbers

42,395

9,588

Number of shares
As of March 31, 2009
447,874(Note) 1. The increased numbers are of purchase of shares which number is less than unit amount.
2. The decreased numbers are of selling of shares which number is less than unit amount.

- 40 -

(Lease Transactions)1) Finance lease transactions (borrower)
Lease Assets related to the finance lease transaction that does not transfer ownership
Contents of Lease Assets
Tangible Lease Assets
Mainly, host computer and server (Tools, materials and equipment)
The method of depreciation of the assets under finance lease
Straight-line method its useful lives are equals to the lease term and theresidual values are equal to zero2) We still have adopted the similar manner to an ordinary rental transaction for the finance leasetransactions that do not transfer ownership and the starting dates of the lease transactions werestbefore 31 March 2008, as follows:(Previous period)(Current period)

1,051 mil. yen
642
408

819 mil. yen
567
251

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

209 mil. yen
351
560

163 mil. yen
233
397

Lease payments
Depreciation equivalentInterest expense equivalent

240 mil. yen
260
15

232 mil. yen
210
12

Acquisition cost equivalent
Accumulated depreciation equivalentBook value 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, 2008 and 2009, there was no stock issued by subsidiaries or affiliated companies thathave market quotations.

- 41 -(Tax-effect accounting)
1. Major components of deferred tax assets and liabilities
Previous period(as ofMarch 31, 2008)
Deferred tax assets (current)
Accrued enterprise tax

101

Allowances for bonus payables
Allowances for loss on clearance of businessAccounts receivable
OthersGross deferred tax assets (current)
Offset with deferred tax liabilities (current)
Net deferred tax assets (current)

mil.
yen

314
791
196
85
1,488
(11)
1,477

Deferred tax liabilities (current)
Reserve for special depreciation

11

Gross deferred tax liabilities (current)
Offset with deferred tax assets (current)
Net deferred tax liabilities (current)

11
(11)
-

Deferred tax assets (fixed)
Impairment loss of fixed assets

830

Valuation difference of land
Devaluation of investment to affiliates
Allowance for doubtful accounts
Allowance for loss on investment
Accrued pension and severance costAccrued severance indemnity for directors
and corporate auditors
Loss from bad debt
OthersMinor total
Allowance accountGross deferred tax assets (fixed)
Offset with deferred tax liabilities (fixed)
Net deferred tax assets (fixed)
Deferred tax liabilities (fixed)
Reserve for special depreciation

149

mil.
yen

10

mil.
yen

mil.
yen

10
(10)
mil.
yen

867
149
283
1,080
2,648
357
228

117
102
3,761
3,761
(3,761)
-

117
125
5,865
(1,609)4,247(2,617)
1,629

11,274
11,291(3,761)
7,529

of

338
791
187
54
1,521
(10)
1,510

149
283
1,007
629
443
197

16

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

Current period(asMarch 31, 2009)

mil.
yen

5

mil.
yen

mil.
yen

61
2,550
2,617
(2,617)-

2. Reconciliation of the difference between statutory tax rate and effective tax rate after adoption oftax-effect accounting
Previous period(as of Current period(as ofMarch 31, 2008)
March 31, 2009)
Statutory tax rate
40.5%
40.5 %(Adjustments)
Permanently disallowed items such as entertainment expenses
2.2
4.2
Permanently non-taxable items such as dividends received
(1.3)
(4.5)
Per capita charges of inhabitant taxes
0.9
2.7
Tax credits on research and development expenses, etc.
(4.9)
(15.3)
Gain on cancellation of shares for absorption of subsidiary(3.9)
Allowance account
59.5
Others(0.9)(3.2)
Effective tax rate after adoption of tax-effect
36.5
80.0
accounting- 42 -

6. Changes in Directors and Corporate Auditors
We will disclose as soon as the decision is made.

- 43 -