Contents

NIPRO Annual Report 2023

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section01

Contents

01

02

Contents

04

About NIPROManagement
Message08

Review ofOperations

02 Businesses

04 President’s Message

08 Medical-Related Business

03 Financial Highlights

07 Message from the CFO

10 Pharmaceutical-Related Business
12 PharmaPackaging Business

14

Outline of theMedium-Term
Management Plan

14 Aiming to Achieve Consolidated Sales of¥1 Trillion in the FYE 2031.3

1722Social Bond
Reporting

17 Investment Status of Social Bonds
and Loans

16 Approaches to SDGs

Management
Foundation

22 Sustainability of Nipro

44 Financial Review

24 Environment

49 Ten-Year Summary

26 Human Resources Strategy

51 Consolidated Balance Sheets

30 Research and Development Activities

52 Consolidated Statements of Income

33 Intellectual Property Investment

52 Consolidated Statements ofComprehensive Income

35 Status of Corporate Governance
39 Outside Directors’ Messages
41 Audit & Supervisory Board Members’Messages
42 Board of Directors and Audit &Supervisory Board Members

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About NIPRO
Businesses
Financial Highlights

53 Consolidated Statements of Changes
in Net Assets
54 Consolidated Statements of Cash Flows
55 Notes to Consolidated Financial Statements
75 Corporate Information

Disclaimer
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Management
Message

44

Financial/
Data Section

Review ofOperations

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This report contains forward-looking statements regarding
business indices, strategies, and performance representing
the expectations and judgments of the management, basedon the information available to the Company and publishable
at the time this report was prepared. When reading this report,
please understand that forward-looking statements involve
potential risks and uncertainties; actual future businessperformance and forecasts may therefore differ materiallyfrom those contained in these statements, given the possible
emergence of new factors or changes in economic circumstances and/or the business environment. In this report,
fiscal 2023 represents the year ended March 31, 2023.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section

02

Businesses
Financial Highlights

About NIPRO

Business e s
We Meet the Needs ofSales ratio by business (Fiscal 2023)

Pharmaceutical-Related Business

13%

Medical Professionals andPatients through Our Three Businesses
Medical-Related Business

Medical-Related
Business
Nipro engages globally in the development,
manufacture, and sale of medical equipment for
injection-infusion and dialysis treatment, andproducts related to diabetes and cell cultures, as wellas the sale of artificial organ-related products.

77%

Hospital Products

Vascular
Products¥545,199 million

10%

PharmaceuticalRelated BusinessPharmaPackaging
Business

One of the world’s leading CDMO* companies, Nipro
performs contract manufacturing of orally administered drugs, injectables, and external preparations
through its Pharmaceutical-Related business, andsupplies products to pharmaceutical companies inJapan and around the world.

Nipro’s PharmaPackaging business, a part of thecompany since its founding, manufactures and sells
glass products and other comprehensive pharmaceutical packaging. Currently, Nipro engages in thisbusiness globally from a base of 11 companies and
14 plants in 8 countries, focused on Japan, China,
Europe, and the U.S.

* Contract Development and Manufacturing Organization
Renal
Products

PharmaPackaging BusinessNet sales

Injectables

Glass
Converting

OrallyAdministered
Drugs

Glass
TubingExternal
Preparations

DevicesContents

NIPRO Annual Report 2023

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Message

About NIPRO

Social Bond
ReportingManagement
Foundation

Financial/Data
Section03

Businesses
Financial Highlights

About NIPROF i nancia l Hig h lig hts
Net sales

Operating income

Net income attributable to owners of
the parent

R&D expenses¥545,199 million¥17,729 million¥4,574 million¥19,669 million

Net Sales increased by 10.2% compared to theprevious term's figure due to the addition of
the increased costs of raw materials, energy,
and logistics to product prices as well as aweaker yen.

Operating income decreased by 25.8% compared to the previous term’s figure due to increased sales and general and administrative
expenses, as well as insufficiently adding theincreased costs of raw materials, energy, andlogistics to product prices.

Net income attributable to owners of the parent
decreased by 66.0% compared to the previous
term’s figure due to the allocation of deferredincome taxes to deferred income-tax assets, etc.

R&D expenses increased by 5% compared to theprevious term’s figure due to the increased costs ofdeveloping the dialysis information-management
system, various clinical-trial studies, etc.

(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

455,559
426,399 442,516

494,789545,199

26,42023,827

27,62723,882

2020

2021

2022

2023

2019

2020

2021

2023

2022

Capital investment

Total assets/Equity ratio¥95,991 million

Total
assets:Capital investment increased by 30.3% comparedto the previous term’s figure due to the construction of a new dialyzer plant, enhancement of
manufacturing facilities for various glass productsin Europe and the United States (U.S.), etc.

Total assets increased by 10.4% compared tothe previous term’s figure, and the equity ratio
reached 20.1%.

(Millions of yen)

70,58056,276

Total assets (Millions of yen)
Equity ratio (%)

845,821 831,865 854,396

73,675930,3211,027,399

57,86619.1

17.9

16,526

19.9

18.8

20.1

18,204

18,652

18,734

2020

2021

2022

19,669-12,281

2019

2020

2021

2022

2023

Net assets/Return on equity¥1,027,399 million

95,991

13,455
4,574

17,7292019

14,20912,136

ROE:

2019

2023

Cash dividends per share

2.3%

¥22.0

ROE declined to 2.3% due to the decrease in the
net income attributable to owners of the parent

The annual cash dividends per share was set at
22 yen per share, with an interim dividend of
13.50 yen/share and a term-end dividend of
8.50 yen/share.
(Yen)

Net assets (Millions of yen)
ROE (%)

171,830

161,237 174,053

7.3

9.2

199,867

242,173

28.0

28.0

27.0
22.0

7.8
13.5

2.3

-7.9
2019

2020

2021

2022

2023

2019

2020

2021

2022

2023

2019

2020

2021

2022

2023

2019

2020

2021

2022

2023

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section04

President’s Message
Message from the CFOManagement Message

P re s iden t ’s Me ss a g e
We will make
improvements bychanging the profit
structure to achievesales of 1 trillion yen

Performance during the fiscal year ended March 31, 2023
Operating income

Net sales¥545,199

million¥17,729(10.2% increase fromthe previous fiscal year)(25.8% decrease fromthe previous fiscal year)

Performance summary for the current fiscal year

The speed of sales growth is sufficient.
Our future challenge lies in improving
the profit margin.

Yoshihiko Sano
President andRepresentative Director

millionDuring this period, sales accounted for 545,199 million yen(a 10.2% increase YoY), and the average annual growth rateof sales was 8.9% since the fiscal year ended March 31,
2013. Thus, we are steadily transitioning toward achieving along-term sales target of 1 trillion yen for the fiscal year
ending March 31, 2031.
Accordingly, our future challenge lies in improving the
profit margin. The operating income margin in this period was
3.3% (a decrease of 1.5 percentage points YoY), which was
low compared with the target of 9.0% or more, specified in
the medium-term management plan. The main reasons for thestagnant operating income margin were the acceleration ofoverseas inflation, rising raw material costs, and a significant
increase in transportation costs. Transportation costs
improved after December 2022 and returned to the normal
level in August 2023.

Net income attributable toowners of the parent¥4,574

million(66.0% decrease fromthe previous fiscal year)

The current issue faced by Nipro is that its capital
investment is not sufficiently fast to catch up with the growthrate of product sales with strong customer needs. Therefore,
we must change the profit structure to further accelerate
capital investment.
As a corporate manager, I think the operating income
margin must be higher than 10%. To realize this, we will make
rapid corrections to the fair prices corresponding to inflation
costs and rising raw material costs. In addition, we will
increase the production quantity after raising the unit saleprice and thoroughly conduct Nipro’s original business
operations to enhance user satisfaction.
Measures for improving the profit margin

Strengthen product competitiveness andenhance the independence of divisions.
To implement the three strategies, we need to further
strengthen product competitiveness, the source of Nipro’s
value. To support this from the system perspective, we
reformed the organization in April 2023 and further increased
the independence of the divisional system, as explained below.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section05

President’s Message
Message from the CFOManagement Message

P re sid ent ’s M essa g eStrengthening product competitivenessFor product competitiveness, we will strengthen the sale ofdialyzers, our major product, mainly in emerging countries
with high growth potential, such as India and Africa; this will bein addition to expanding its share in North America. In addition
to China and India, we are reinforcing a new line of the Odate
Plant as capital investment for this purpose. Considering thevascular business that we have been focusing on, we willcontinue to develop new products in both the imaging andscoring balloon fields and strive to sell them worldwide.
Sales of hospital-related products continued to be strong,
mainly in the emerging countries in this period. We will
strengthen the Vietnamese factory’s production lines andproduce high-value-added products in the future.
We have launched new competitive products related topharmaceuticals. In particular, the sale of esomeprazole(Nexium AG), our second authorized generic* drug, performed
well during this period. Authorized generics are productsthat are trusted by doctors and patients more than ordinary
generics and are expected to grow in the future.
Regarding PharmaPackaging, sales of high-value-added
products, such as sterile prefillable syringes, have been
performing well. We will continue to increase our production
capacity in a step-by-step manner to expand our share.
In addition, we are operating dialysis centers mainly inemerging countries such as South and Central America,
China, Malaysia, and Brazil. Until the end of March 2023,
we opened our own dialysis centers in 175 locations in 11
countries. We will contribute to the regional medical care andsimultaneously conduct package sales of our renal products.
* A product that is particularly certified by the manufacturer of the brandname drug among generic drugs. It not only has the same ingredients as
the brand-name drug, but also the same drug substances, excipients,
manufacturing methods, etc.

Reinforcement of the divisional system
For organizational reform, we have strengthened the divisional
system and increased the independence of each division
more than before. Specifically, the former managing directorsof the Domestic Division and Global Business Division were
promoted to senior managing directors so that they could
make the necessary management decisions in each division.
This makes it easier for each division to reflect on the field’sneeds. In addition, the responsibility for budget management
is clarified, and awareness of expenses increases, which isadvantageous. Each plant has been working independently
as a Global Production Division, but the division has beenabolished and changed to an operational system integrated
with the sales strategy. Through this, we aim to create asystem in which the sales and production divisions respondto the needs of users together, improve unit sales prices,
and increase quantity.
We have also strengthened the functions of the head
office that manages various KPIs, such as the ROE andoperating income margin, and established a committee for
operational and cost efficiency. We can expect further
improvement in profits through the cost-reduction plansuggested by Corporate Planning.
Response to risk compliance

Invest in the management resources
necessary for protecting the business.
I have mainly explained the benefits of the above business,such as improving profit margins. Mentioning risk compliance,
the aspect of protecting the business, we experienced two
major incidents during this period: a fire at the Odate Plant No. 5
and business improvement orders to Nipro Pharma Corporation.

First, a fire occurred at the Odate Plant No. 5 in March
2023. There was no human damage, and physical damage
affected the four dialyzer production lines at the Plant No. 5.
The two lines will be replaced in the future, and the productionof the other two lines was resumed on April 6, 2023. Some
products were supplied as substitutes for domestic sales, but
the situation is currently normalized. The temporary decreasein the production of our major products is a significant issue.
We will work on expanding the production capacity for theoverall supply volume in a dispersed manner as measures for
future risks.
Regarding the business improvement orders to Nipro
Pharma, there was no final quality problem. However,noncompliance with the manufacturing process stipulated in
the “Act on Securing Quality, Efficacy and Safety of Products
Including Pharmaceuticals and Medical Devices” is a problem
in terms of compliance. This incident occurred because of
insufficient personnel necessary for inspection. Therefore,
we will invest in the necessary management resources tosecure inspection personnel and establish a new inspectionNIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section06

President’s Message
Message from the CFOManagement Message

P re sid ent ’s M essa g e
center outside the plant. Therefore, we will proceed with corrective actions. We submitted an improvement plan/report on
this matter to Akita Prefecture and obtained a conformancecertificate on June 22, 2023.

Environmental implications
With regard to the environment, we are working on various
initiatives that focus on reducing greenhouse gases andpromoting renewable energy. As a specific results of our initiatives, we received “B” for the climate change report from
CDP in the current period. We will make the most of the resultsof this evaluation for future improvement activities andactively work toward the further disclosure of information.
In Europe, corporate environmental measures are regarded
as conditions for business transactions. The disclosure ofsustainability information based on CSRD will be an issue inthe future. The CSRD particularly emphasizes the environment and human rights described below, and we consider it
necessary to improve not only information disclosure but
also actual figures.

the characteristics of the industry, forced labor is unlikely tooccur in Nipro, and no human rights violations have beenreported at present. However, I believe that human rights
security, including that of suppliers and supply chains, will
become important in the future. We will continue to focus on
strengthening our monitoring capabilities.
From the perspective of diversity, it is also important toincrease the percentages of female managers and non-Japaneseemployees. I think that these points should be improved in
Nipro. However, Nipro’s overseas bases have already actively
hired local human resources for management, which has been
conducted in a local style. Thus, I believe that the diversityof nationalities is increasing considerably.
Regarding human resource strategies, we will thoroughly
evaluate employees using a payment-by-results system on
the premise of recruiting and developing motivated employees.
We introduced a mandatory retirement system for people aged
65 during this period. We have established a system in which
senior employees’ technical capabilities and experiences will
be handed over to young employees of the next generation.
Another thing I would like to tell you about social contributions is that we have a training facility called iMEP for
doctors, nurses, pharmacists, and technicians. Because oursales members serve as coordinators for this institution,
they have the opportunity to interact with healthcare professionals. In addition, they use the knowledge obtained there
and are thus promoted to convert our employees to technicalsales. We have 20 training facilities, including iMEP, around theworld, and contribute to community medical care in addition
to our own human resource development.

Social implications
Regarding the social aspect, as Nipro has many sales andmanufacturing bases in emerging countries, whether there
is any violation of the human rights of employees, includingchild labor and forced labor, has been questioned. Considering

GovernanceWe significantly reduced the number of directors, mainly internal directors, during this period; additionally, we increased
the number of external directors to 6. As explained last year,
the role of the Board of Directors of Nipro is to understandInitiatives for sustainability

Respond to European Sustainability
Reporting Standards.
To ensure sustainability, we established the Sustainability
Committee (Chief Sustainability Officer (CSO) = Senior Managing
Director Yogo) from the period ended March 2022. We haveestablished subcommittees for environment, social, andgovernance and they have been working on specific initiatives.

users’ viewpoints. Our external directors are human resources
with experience in the fields of medical care and welfare; wesoon engage in discussions with them while incorporating
the external users’ viewpoints. In addition, a reduction in thenumber of members on the Board of Directors has enabled
us to make decisions promptly, which is advantageous.
Accordingly, the effectiveness of the Board of Directors has
also improved.
To shareholders

Improve the profit margin for the realizationof long-term goals.
We moved our head office functions to Kento Innovation Parkin Settsu, Osaka, in April 2023. Accordingly, we will consolidate
our research and development functions and strengthen theindustry-government-academia collaboration led by the
National Cerebral and Cardiovascular Center.
Considering this transition as a milestone, we will renew
our frame of mind toward achieving the sales target of 1 trillion
yen for the fiscal year ending March 31, 2031. Our futurechallenge is to improve the profit margin. We will make
improvements to the profit structure from a thorough user
viewpoint, as described in the action guidelines, and sellcompetitive products globally.
We would appreciate the continued support of the
stakeholders, including shareholders.
September 2023

President and Representative Director

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section07

President’s Message
Message from the CFOManagement Message

M essa ge fro m th e C F O
Promoting the Medium-Term
Management Plan and building
a lean financial structure
Progress of the Medium-Term Management Plan
We have set KPIs from the five viewpoints of “growth potential,”“profitability,” “investment efficiency,” “financial health,” and“asset efficiency” in the Medium-Term Management Plan, withthe fiscal year ending March 2025 as the final year.
Regarding “growth potential,” we aim to achieve an average annual sales growth rate of 7.0% or more. It was 6.6% inthis period because the growth slowdown due to the COVID19 pandemic eased and overseas sales revenue significantly
increased due to the weak yen. The sales growth rate in thefiscal year ending March 2024 is expected to be 9.9% and theaverage sales growth rate is expected to be approximately 7.2%.
Regarding “profitability,” we aim to achieve an operating
profit margin of 9.0% or more. It was 3.3% during this period,

Takehito Yogo

Senior Managing Director andGeneral Manager ofCorporate Planning Divisionowing to the soaring costs of transportation, raw materials,
and energy. It is expected to recover to 4.0% in the fiscal year
ending March 2024 because increased costs will be passed
on to prices, and transportation market prices are expected todrop. We aim to achieve an operating profit margin of 9.0%
or more through worldwide reinforcement of manufacturing
and sales of dialyzers (our main products), strengthening
sales of high-value-added products, and improving revenue
through vertical integration from manufacturing to treatmentby acquiring dialysis centers.
Regarding “investment efficiency,” we aim to achieve
a profitable free cash flow. The operating cash flow significantly decreased during this period because of an increasein the purchase of active pharmaceutical ingredients in preparation for procurement difficulties, an increase in inventory
due to the accumulation of initial stock related to the introduction of newly authorized generic drugs, and a decrease
in income before income tax. Meanwhile, the free cash flow
fell 61,600 million yen into the red because the investment cash
flow remained at a high level. In the fiscal year ending March
2024, the free cash flow is expected to be 26,800 million yen
because of measures such as the compression of working
capital by promoting the liquidation of receivables and salesof idle assets and securities, in addition to the improvementof operating income. It was 240,200 million yen in the black in
the period March 2021 to March 2023, and it is planned to be
62,100 million yen in the period ending March 2024. However,
we will focus on investing in products with a high profit
margin and aim at around 350,000 million yen by the fiscal year
ending March 2025, as in the Medium-Term Management Plan.
Regarding “financial health,” we aim for four times thenet interest-bearing debt-to-EBITDA ratio. The net interestbearing debt-to-EBITDA ratio increased to 7.7 times during
this period due to a decrease in operating income and anincrease in net interest-bearing debt. In the fiscal year ending
March 2024, we plan to improve the net interest-bearing
debt-to-EBITDA ratio by a factor of 6.2 times by compressing
interest-bearing debt and increasing operating income.
Regarding “asset efficiency,” we aim at an ROE of 14.0%
or more. The net income attributable to the owners of theparent significantly decreased during this period owing to theimpact of hyperinflation accounting and tax effect accounting
in Europe. In addition, the ROE was 2.3% because of anincrease in equity capital through foreign currency translation
adjustments. The ROE is expected to be 4.9% in the fiscal
year ending March 2024, owing to an improvement in thecurrent net income attributable to the owners of the parent.

Status of capital investment
Capital investment in this period increased by 30.3% fromthe previous term to 95,991 million yen. The major reasonsfor the increase include the expansion of new dialyzer lines
at the Odate Plant No. 7, the establishment of the Nipro
Pharma Omi Plant, and the improvement of manufacturing
facilities related to PharmaPackaging.
The capital investment for the fiscal year ending March2024 is planned to be 62,130 million yen, a decrease of
35.3% from this fiscal year. Although capital investment has
increased due to the establishment of new QC centers in
Saitama and Osaka, it will significantly decrease due to thecompletion of new dialyzer lines in India, Vietnam, and China,
and the completion of the renewal of manufacturing facilities
in the U.S. and France. Thus, capital investment is expected
to decrease significantly.

Change in dividend policy
We have changed the dividend policy to distribute shareholder
returns by payment-by-results when our performance isgood, effective from the fiscal year ending March 2024.
Thus, we aim to pay stable dividends to shareholders.
Under the revised dividend policy, consolidated net
income is used as the core profit for dividends, and 35% of
the net income is the dividend resource. We aim for stabledividends and set the dividend per share at a lower limit of
25 yen per year.

NIPRO Annual Report 2023

Review ofOperations

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Social Bond
Reporting

Financial/Data
Section08

Medical-Related BusinessPharmaceutical-Related BusinessPharmaPackaging BusinessMe d ic al-Re l a te d B u si ne ss

Infusion products 4.1%

Net sales for each area and product(Fiscal 2023)

Renal products 37.0%

Japan

50.2%
Net sales
Total

Injection
products 11.2%

Vascularproducts
8.4%

Inspection products 2.7%
Diabetic products 2.1%
Surgical products 1.7%
Nipro Brand generic products
25.6%

Overseas¥419,957

Others7.1%

49.8%

millionOverview of fiscal year ended March 2023

Forecast and strategy for the fiscal year ending March 2024

Domestic sales of renal products improved from the start of the term, although there wereshipping-adjustment effects for some medical devices due to the lockdown in Shanghai City,
China. In addition, sales of vascular and surgical-devise-related products improved alongwith a loosening of various regulations for new coronavirus infections. Regarding drugs, salesof esomeprazole P O I N T , an authorized generic drug launched in December 2022, improved,
and the share of other new products’ sales also rose. Additionally, for antibiotic and infusion
products, the drug prices rose due to the application of re-pricing for unprofitable productitems, and the sales amounts increased compared to those in the previous year, leading to a
sharp increase in revenue.
Consequently, net sales and operating income were 419,957 million yen (+12.4%
compared to that of the previous term) and 38,599 million yen (‒1.6% compared to that ofthe previous term), respectively.

Regarding the financial performance in the fiscal year ending March 2024, net sales and operating
income are expected to be 460,200 million yen (+9.6% compared to the current-term figure)and 43,310 million yen (+12.2% compared to the current-term figure), respectively.
Regarding domestic sales, the revenue from medical devices is expected to increase by
11,940 million yen compared to the current-term figure due to an increase in the sales volume
of infusion products, catheters, and assist pumps/oxygenators, in addition to an increase in
the sales volume of renal products. Regarding drugs, sales of esomeprazole are expected tocontinue to rise. In addition, re-pricing for unprofitable product items was temporarily andexceptionally applied to all products at the NHI drug-price revision to deal with an abrupt
steep rise in prices for raw materials and issues related to stable supply. Therefore, the revenue
is expected to greatly increase by 13,620 million yen compared to the current-term figure.
The operating income is expected to increase by 4,720 million yen compared to thecurrent-term figure, mainly due to the trend of decreased delivery costs overseas andanticipated addition of the increased prices of raw materials to product prices.

Net sales
2023

2022

2021

(Millions of yen)

419,957

373,481343,824

Operating income(Millions of yen)

2023

38,5992022

39,2412021

38,879POINT

Approximately 53% of domestic share (76% for generics) was obtainedfor esomeprazole (Nexium AG)
Esomeprazole, which was launched in December 2022, has been favorably evaluated as an authorized generic (AG) with high reliability in the market. With the domestic share of approximately
53%, it is a product that is expected to continue growing in the future.

NIPRO Annual Report 2023

Review ofOperations

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section09

Medical-Related BusinessPharmaceutical-Related BusinessPharmaPackaging Business

Med i c a l - Rel a ted B u si n e ss

TOPICS

Overseas Business

Making efforts to improve the added value of core products and services
Deployment of academic sales of new dialyzers
ELISIO™-HX stands as the world’s sole next-generation super-high-flux*1 dialyzer featuring apolyethersulfone (PES) membrane (as of 2023). Notably, this innovative dialyzer offers two
key advantages: first, it reduces the risk of death by 10% compared to polysulfone (PS) membranes, and second, its super-high-flux capability can further reduce the risk of death by 14%
compared to high-flux* 3 dialyzers. While ELISIO™-HX has
already demonstrated its effectiveness in Japan, this exceptional, high-quality product remains relatively underutilized
overseas. Therefore, scientific evidence on ELISIO™-HX will
be offered by global KOLs*2, and the product that contributes
ELISIO™-HX
to the health of patients will be further spread overseas.
*1 Super-high-flux: Clearance is much superior to high-flux with a high solute removal ability.
*2 Reference: Abe M et al. Am J Nephrol. 2017.
*3 Reference: Abe M et al. Nature. 2021.
*4 Abbreviation of key opinion leader. These are experts such as physicians who have an influence on the sales
promotion of medical devices and drugs.

Renewal of long-term partnership agreement with Diaverum
In April 2023, we successfully renewed our partnership agreement with Diaverum, a leading dialysis
provider, for (1) consumables for another 4 years
and (2) dialysis machines for another 4.5 years.
With this renewal, we are determined to leverage our strong collaboration with Diaverum tosolidify Nipro’s presence in the global market. Our
primary focus will be on promoting and introducing our dialysis machines to a wider audience,
thereby expanding their sales, and securing
stable sales destinations for consumables.

President Sano (left) of Nipro and Mr. Dimitris(center), CEO of Diaverum, at the renewal of
the agreement (Osaka Head Office)Reinforcement of the lineup of hospital-related products
In our commitment to offering comprehensive solutions for hospitals, we are
1. Infusion
reinforcing measures for the following
product lineup in the areas of infusion,
Anesthesia/
Anesthesia/Chemotherapy, blood collection
2.
Chemotherapy
and injection.
3. Blood collection
These measures will enhance ourlineup of high-value-added products, en4. Injection
abling us to strengthen our market positionand drive further expansion in market share.

Development of next-generation
safety IV cath and sales expansionof ST plug
Expansion of Surefuser-related
products
Development of next-generation
safety blood collection needle
Launch of next-generation safety
needleExpansion of our own dialysis center
During fiscal year ended March 2023, we successfully established 28 new dialysis centers, witha primary focus on locations in Malaysia, China, and South Africa. As a result of this expansion
effort, the number of patients utilizing our centers increased by 2,569. As a result, our own
dialysis centers have been established at 175 locations in 11 countries as of the end of March
2023, and the number of patients has increased to 10,757.
We will continuously contribute to community healthcare by providing high-quality treatment,
particularly in emerging countries.

Advancing in the new business area
Strengthening of the vascular businessWe are deploying the vascular business as the second pillar after renal products. In the fieldof diagnostic imaging devices, we have extended our product deployment to cover the peripheral area, in addition to our existing focus on coronary arteries. Furthermore, regarding
scoring balloons, we will put next-generation products on the market, such as the Lacrosse
Aperta NSE, to increase the market share and create new market opportunities.
Efforts toward the spread of CL Fine
We are proceeding with the introduction of the ionless hypochlorous acid solution “CL Fine” as an infection measure. In 2022, we
conducted an efficacy study and attempted to build relationships
with the governments of various countries. We are also actively
communicating with infectious disease KOLs and offering academic evidence, such as organizing awareness-raising activities
through seminars.
In 2023, our efforts will expand to include not only enabling
the solution of a highly concentrated product of 500 ppm to bediluted and sprayed but also introducing a new product for air andsurface sterilization.

Presenting information
at seminars

NIPRO Annual Report 2023

Review ofOperations

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
Section10

Medical-Related BusinessPharmaceutical-Related BusinessPharmaPackaging BusinessP h ar mac e uti c a l - Re l a te d B usi ness
Production capacity(March 2023)

Ampules (glass/plastic)
Vials (powder/liquid/

700

million units(PFS®)

OrallyAdministered
Drugs

Tablets

14.8

CapsulesExternal
Preparations

Tapes (solvent type)120

Injectables

lyophilized products)

billion tablets

million sheets

Net sales
Total

Pre-filled
syringes

Tapes(hotmelt type)160

million units

400

millioncapsules580

million sheets

Dual chamberbags (PLW®)

33

million units

Liquid-liquiddual chamber
bags

Granules, dry
syrups

610 tons

SyrupsPoultices¥72,734

390

million sheets(converted to
10g-sheet units)

Ointments,
creams4

million units

460

thousandbottles

16.3

million tubes(converted to
10g-tube units)

millionOverview of fiscal year ended March 2023

Forecast and strategy for the fiscal year ending March 2024

Regarding the pharmaceutical-related business, several new products in Japan have started
shipments and commercialization, and Nipro JMI Pharma in Bangladesh recorded strong sales.
Meanwhile, the net sales decreased slightly compared to that of the previous term due todecreased orders of existing products and the end of contract manufacturing as well as
decreased production volume due to problems with materials and manufacturing facilities.
Operating income decreased largely from the previous year due to a decrease in production
volume, which was a factor in the decline in net sales, and an increase in manufacturing costs
resulting from a significant rise in raw materials and energy prices. As a result, net sales in thissegment were 72,734 million yen (down 2.2% from the previous year), and operating income
was 5,615 million yen (down 42.8%).

Regarding the financial performance in the fiscal year ending March 2024, net sales andoperating income are expected to be 79,700 million yen (+9.6% compared to the current-term
figure) and 7,170 million yen (+27.8% compared to the current-term figure), respectively.
For generic and original/long-listed drugs, although some of the products will be impacted
by sales discontinuation, the start of sales of new contract-manufacturing products and restoration of anticancer drugs, antibiotics, etc., the shipment of which was decreased, are expected.
As the result, domestic sales are expected to increase by 7,045 million yen from the current
fiscal year. Meanwhile, sales overseas are expected to decrease by 76 million yen compared tothe current-term figure due to exchange-rate fluctuations, although a sale increase is expected
on a local-currency basis* due to the active market extension by Nipro JMI Pharma Ltd.
Regarding operating income, a higher cost of sales is expected due to the recent continuing
significant rise in energy and raw material costs and an increase in manufacturing expenses
due to the strengthening of the quality assurance system. However, we expect an increaseof 1,562 million yen from the current period through efforts to reduce costs by improving
production efficiency and setting appropriate sales prices. Regarding the structure, we willcontinue to invest in facilities and equipment to ensure a stable supply of products andstrengthen our quality assurance system. P O I N T

Net sales

(Millions of yen)

Operating income(Millions of yen)

POINT
2023

72,7342023

2022

74,3862022

2021

72,388

2021

5,615

* Calculated based on 1 Bangladeshi taka = 1.40 yen in the fiscal year
ended March 2023 and 1.25 yen in the fiscal year ending March 2024.

Strengthening of the quality-assurance system at Nipro Pharma
9,826

10,608

Along with the increase in production volume and production items, we are working to reduce the test
operations at each manufacturing site and enhance the testing ability and staff productivity. A new
testing building that includes the QC training center was built and operations at the Saitama Site, Nipro
Pharma Corporation commenced in June 2023. In addition, the Osaka QC Center is being constructed
as a testing facility in Osaka City. Operations at the facility are planned to commence in March 2024.

NIPRO Annual Report 2023

Review ofOperations

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section11

Medical-Related BusinessPharmaceutical-Related BusinessPharmaPackaging BusinessPh a r ma c euti c a l - Re la te d B us i n e ss

TOPICS

Nipro Pharma Corporation Omi Plant (New Plant Project)

Efforts to strengthen the production system

Strengthening of production system at injectable drug plants
Nipro Pharma Corporation Ise Plant
The pre-filled syringe line was expanded at the Nipro Pharma Ise Plant. Production commenced
in April 2023.
The newly introduced lines are 2 types: (1) Volume 1–3 mL and (2) Volume 5/10 mL. The
production capacities are 59 and 55 million products/year for (1) and (2), respectively. This
provides a further expansion of production volume and strengthening of BCP measuresthrough the decentralization of manufacturing sites.

A new injectable-drug plant, Nipro Pharma
Corporation Omi Plant, is being constructed in
Shiga Prefecture. We plan to complete theconstruction in January 2024, start the technicaltransfer for production in April 2024, and releaseproducts from 2025. The product items include
Doublechamberbag of antibiotic drugs, andproduction capacity is expected to be 10 million
bags/year. In addition, operations at a building
for the production of vial products is also planned
to start in 2026 as a second-phase plan.

Second-phase
construction
A building for the
production of vials

Omi Plant, Nipro Pharma Corporation underconstruction

Strengthening of production increase system at the oral drug plant
Zensei Pharmaceutical Co., Ltd.

New building for the pre-filled syringe line

Zensei Pharmaceutical Co., Ltd. has constructed
a new building at the Kishiwada Plant, which
combines the function from development toproduction of investigational products, testingof commercial products, and warehousing.
The construction was completed in November
2022, and the operations have star ted
sequentially from April 2023. The constructionof the new building will enable the entire plant
to produce 2 billion tablets/year. We will
establish a production system that can adopt
to expand the testing area, introduce an PTP packaging line under construction
automated rack-type warehouse, and handle
highly-active investigational agents.
In addition, packaging machines, etc. will be installed at the Izumi Plant. Operations will
start sequentially from March 2025, and the production capacity will be expanded to 2.5 billion
tablets/year.

Contents

NIPRO Annual Report 2023

Review ofOperations

About NIPRO

Review ofOperations

Management
Message

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section12

Medical-Related BusinessPharmaceutical-Related BusinessPharmaPackaging BusinessPhar maPackaging Business
Sales ratio by region (Fiscal 2023)
China 9.9%

Europe 40.3%

India 3.1%

Net sales
Total

United States 23.8%¥51,754

Japan 22.8%

millionOverview of the fiscal year ended March 2023

Forecast and strategy for the fiscal year ending March 2024

The PharmaPackaging Division this year encountered high inflation cost. We had applied
measures to secure profits by increasing sales prices both in Japan and overseas market andby improving production efficiency.
In Europe and the U.S. market, increasing production capacity of glass tubing (the raw
material of pharmaceutical glass packaging containers) and successful promotion over time
has resulted in significant shipment expansion of glass packaging containers, such as vials
and ampoules.
In Japan, the shipment of COVID-19 test swabs and single-use bags increased significantly.
In addition, the market in China has resumed and is back to normal after the zero-COVID
policy was lifted, and we continue sales activities to strengthen our presence in the market.
As a result, the sales revenue of the segment was 51,754 million yen (+11.6% compared tothat of the previous term), and the operating income was 2,739 million yen (-5.2% comparedto that of the previous term).

In Europe, expansion in production capacity for glass tubing and sterilized glass syringes is
expected to solve the order backlog mainly towards Europe and the U.S. market. In addition,
expanding production capacity of glass tubing in the U.S. and the increase in demand for
global standard ampoules in China will reflect to an increase in sales revenue to 58,910 million
yen, a 13.8% increase compared to last year.
On the contrary, operating profit is expected to decrease to 2,320 million yen, a 15.0%
decrease due to high labor, raw materials, and energy costs worldwide, with an additional foreseen expense for trial production and training to cope with the larger production system.

Net sales

(Millions of yen)

51,754

2023

2022

2021

46,361

38,655

Operating profits(Millions of yen)

2,739

2023

2,889

2022

2021

1,992

POINT

Market environment and growth strategies
In medically advanced countries, standard requirements of glass containers for new drugs havebecome more demanding, whereas in medically emerging countries demand for glass containers
for generic drugs is expected to expand rapidly associated with the increase of the middle-income
population. The COVID-19 pandemic has triggered countries to reinforce anti-infection measures,
and at the same time, inflation and financial policy of countries has also suppressed the healthcare
expenses. Additionally, preventive treatments and home medical care are spreading worldwide,
leading to the increase in the need for user-friendly glass containers and drug administration devices.
Under these circumstances, our future goals are to carefully respond to the needs of stakeholders in each region and to provide flexible products supply at appropriate prices by using four
growth strategies: strengthening product competitiveness, improving the stable supply system,
increasing market coverage, and improving productivity.

Contents

NIPRO Annual Report 2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section13

Medical-Related BusinessPharmaceutical-Related BusinessPharmaPackaging Business

Review ofOperations

Ph a r ma Pa c ka g i n g B us i n e ss

Sterilized rubber parts (High-pressure steam sterilization)

TOPICS
Improvement of product portfolio
Glass primary packaging containers and devices for injections
In respond to the wide range of needs of pharmaceutical companies and users, we are
improving the lineup of our main products, glass primary packaging containers and devices forinjections. Firstly, we will reinforce the manufacturing system of VIALEX™, vials compatible
for biopharmaceuticals in Japan, the U.S. and Germany plants.
Regarding pre-fillable syringes, we are now in the phase of increasing the production
capacity of ready-to-use products, sterilized syringes D2F™, at the same time expanding
sales of D2F™ accessories parts such as LInC™, Luer lock integrated cap for D2F™ and starting
commercial shipments of hypodermic needle CURACASE™. Furthermore, the development ofhigh-value-added products such as syringes with safety functions and Exadose™ has been
completed, and a full-scale production system is under consideration.

Vials

Prefillable Syringes (PFS)High Value-Added Products

For biopharmaceuticals

PFS related products

Products with safety functions
and less pain

The demand for ready-to-use products has increased in recent
years in the pharmaceutical industry. The use of ethylene oxide
gas during sterilization is recently being avoided due to safety
and environmental considerations. Given these circumstances,utilizing a different approach such as by steam-sterilizing
in-house manufactured rubber parts will have lower environmental
impact. We plan to establish a similar sterility assurance system
for glass syringes in the future.

Rubber parts

Rubber parts
after sterilization

Establishment of a stable supply system
Completion of new glass tubing facility in Aumale, France
The new glass tubing facility in Aumale, France was completed
at the end of 2022 and has started production to address
the global increase in demand for medical-use glass tubing.
The production capacity of NSV-51 glass tubing at Nipro hassignificantly increased by 25%. The tubing is not only sold toexternal customers but also used as raw materials for pharmaceutical glass container production within the Nipro Group.
In addition, the new furnace with a full oxygen combustion
process has reduced CO2 emissions by 47% compared tocorresponding existing furnaces.

Overall view of the new glass tubing
facility in Aumale, France

Selected as Top 50 “Great Place to Work” among Indian manufacturing companies
Vialex™

CURACASE™ LInC™

D2F™

Safety syringes

Exadose™

Electric pen type injectors for dental anesthesia
The electric pen type injectors for dental anesthesia with
upgraded waterproof function and shock resistance are
currently scheduled to be launched.
Electric pen type injectors fordental anesthesia

Nipro PharmaPackaging India Private Limited was awarded
a Great Place to Work certificate in 2022 among the top 50
Indian manufacturing companies. The company greatly
emphasizes the education training system and welfare activities and has established a reputation for improvement activities, which contribute to improving employees’ motivation.
Other subsidiaries in the PharmaPackaging division will
participate in this program in the future and further improve
the quality of workplaces.

Certificate of Great Place to WorkNIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
Section14

Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3
Approaches to SDGs

Outline of the Medium-Term Management Plan

Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3
Management Policy

Keeping up with the turbulent times, we will continue to respond to user needs, aim to become
the world's top manufacturer in terms of product competitiveness and market share, and promotelocal production for local consumption globally.

Priority Tasks

Protecting a corporate culture that provides opportunities to motivated people
2 Making decisions from the end-user's perspective is our top priority
3 Upholding the Sanpoyoshi (Win-Win-Win for users, society, and the company) principle
4 Sharing information about each step of the Plan-Do-Check-Act (PDCA) process with all
employees so that they can manage the PDCA cycle with a sense of ownership
5 Becoming a company wherein the organization managers recognize the gap between theory
and reality and can lead their staff to understand it
1

Enhancements

Challenge of becoming the No. 1 manufacturer contributing to regional healthcare in theJapanese market
Providing comprehensive medical infrastructure that connects patients, their families,
hospitals, and pharmacies, as well as offering medical equipment and pharmaceuticals thatmeet medical needs in the marketplace
2 Top share in the global market for dialyzers
Expanding the company's direct sales network and training centers, and accelerating theoperation of our own dialysis centers in emerging countries
3 Deployment of vascular products to the global market and entering new areas in thedomestic market
Establishing a sales network for existing products in the U.S. market with a view to expand
globally, and aiming for a full range of products in the domestic market in the cerebrovascularand arrhythmia fields
4 Deployment of the drug contract manufacturing business to overseas markets
Promoting out-licensing of our GE products in the Chinese market and expanding businessin the U.S. market
5 Development of high-value-added products and reduction of manufacturing costs in the
PharmaPackaging business
Developing high-quality products for biopharmaceuticals and reducing manufacturing costs
by automating the manufacturing process
6 Enhancement of cellular medicine business
Promoting manufacturing automation and expanding business into the European andAmerican markets
7 Development of seeds of new businesses
Business expansion into surgical products, electromagnetic wave therapy products, active
pharmaceutical ingredients (APIs), and pharmaceuticals in new fields

KPIs for FYE 2025.3
Net sales

Average annual growth of

7.0+%

Net debt*

OperatingincomeAverage annual growth of

7.0+%

EBITDA

9.0+%

Net debt/
EBITDA ratio

Operatingmargin ratio

Net sales/Operating margin ratio
Net sales (Left)(100 M Yen)

8,000
6,000

CAGR
7.0+%

2,000

2020 2021 2022 2023 2024
(Forecast)

X5

Net debt/EBITDA (Right)(100 M Yen)

10.0

6,000

7.5

4,500

6.0

5.0

3,000

4.0

2.5

1,500

2.0

Net debt/EBITDA ratio less than X 5

ROE

14.0+%EPS/ROE

8.0

02020 2021 2022 2023 2024
(Forecast)¥200 or higher(Times)02025(Plan)EPS*

Shareholder
return(dividend
payout ratio*)

24.5%(FYE 2023.3)

2025(Plan)

Maintain

35.0%(FYE 2024.3 -)Annual dividend/Dividend payout ratio
ROE (Right)

Annual dividend (Left)

(%)

(Yen)
300

200

Less than

(%)

0

0

EPS (Left)

Aiming for a level of¥100,000+ M or higher

Net debt (Left)

Operating margin ratio
at 9.0+% level

4,000¥450,000 M

Net debt, Net debt/EBITDA

Operating margin ratio (Right)

1

Maintain around24.0

ROE at 14.0+%

(Yen)
80

Dividend payout ratio (Right)(%)

Maintain 35.0% payout
ratio from FYE 2024.3

60

16.0

60

100

8.0

40

30

0

0

20

15

-8.0

0

-100

2020 2021 2022 2023 2024
(Forecast)* EPS: Earnings per share

2025(Plan)

45

02020 2021 2022 2023 2024
(Forecast)

2025(Plan)* Source of dividends shall be sum of 75.0% of consolidated
profits and 25.0% of non-consolidated profits.

Contents

NIPRO Annual Report 2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section15

Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3
Approaches to SDGs

Outline of the Medium-Term Management Plan

Aim ing to Ac h i eve C o n s o l i d a ted S a le s o f ¥ 1 Tr i lli o n i n th e F Y E 20 3 1.3
Capital Investment Policy

Objectives
Expansion of the structure for increasing production of medical devices and pharmaceuticals
In cellular medicine business, promote manufacturing automation and expand business into
the European and American markets
Incubate new business seeds of surgical products, electromagnetic wave therapy products,
APIs, pharmaceuticals in new fields, etc.

Investment status

(Millions of yen)

2021

2022

2023

2024
(Forecast)

Medical equipment(dialyzers, catheters, etc.)

21,11632,271

43,83019,530160,000

Pharmaceuticals

20,61023,11923,35327,70090,000

PharmaPackaging

5,371

9,278

15,561

9,630

30,000

Cellular
medicine

Sapporo Plant andmanufacturing facilities

21,324

3,322

758

180

30,000

Incubationof business
seeds

Production Technology
Center, laboratories, etc.

2,159

5,685

12,4895,090

10,000

Renewal ofexisting
facilities

5-year guidelines for FYE 2025.3

2021-2025(Plan)(Millions of yen)

2021

2022

2023

2024
(Forecast)

2021-2025 (Plan)

EBITDA

70,25470,04865,92378,389Aiming for
400,000–450,000

Capital investment

70,58073,67595,991

62,130300,000–350,000 range

Free cash flows

21,021-10,219-61,616-26,804

Return to profit

Policy on Organization, HR Development, and IT Systems

Overseas holdings structure
Establish holdings in Europe, China, and the U.S. to realize business management by regional
headquarters, and matrix management aiming at rapid business decision-making by each
operating company
Centralize compliance, financial, and tax management
Improve knowledge accumulation and efficiency by consolidating indirect divisions
New business incubation
Human resources development
Nuture training in the medical field to foster a sense of value that enables us to always think
and act from the user's viewpoint
Introduction of the FISH! philosophy, which aims to revitalize the workplace and encourage
employees to thrive in their work, and promote employee motivation
Follow-up training for younger employees, training for different levels of qualifications, andother necessary training for each stage of employment
Focus on the development of global human resources through selective language training,in-house language classes, and a self-development support system for languages
Aim to create a workplace where each employee can maximize their abilities regardless ofrace, nationality, gender, or age; conduct seminars to promote women's activities; and organize exchange meetings to build networks among international employees
Establish a company-wide education and training system to raise compliance awarenessConsidering the physical and mental health of each employee, the "Nipro Health Declaration"
was issued in September 2018, and anti-smoking measures, mental health measures, workstyle reforms, and workplace revitalization activities have been promoted
IT systems
Review system functions to support management efficiently and expeditiously
Enhance security against cyber-attacks, such as unauthorized remittance, information leaks
by targeted attacks, and ransomware
Develop an information infrastructure realizing a work style not confined by time and place,
improving labor productivity and employee satisfactionNIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section16

Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3
Approaches to SDGs

Outline of the Medium-Term Management Plan

Appro ac h e s to S D G s
Social issues that we aim to solve through our business
Providing treatment topatients in remote areas
with limited access• In emerging countries, such as Latin America, dialysis clinics have been set up in suburban areas to provide dialysis treatment to patients living
in remote areas, where it is more convenient for them to receive dialysis treatment.
• In Southeast Asia and Africa, dialysis clinics have been set up in urban areas to provide patients with high-quality treatment.

• The company sells safety products to prevent medical accidents while using medical equipment.
Preventing medical accidents• They include winged needles that prevent needlestick accidents, colored syringes that can be distinguished by color to prevent mix-ups, andat medical institutions
pre-fillable syringes and kit preparations that reduce the risk of foreign matter contamination, bacterial contamination, and needlestick accidents.
Providing safe and secure
medicines for all• The company promotes products that can be used without difficulty, regardless of age or disability.
• The company offers a range of products that enable those with visual difficulties to identify tablets, to write down medication instructions andmedication dates, and to prepare PTP sheets for patients with reduced dexterity.

Dealing with new infections• The company sells products that are in high demand worldwide when new infectious diseases, such as COVID-19, become rampant.
• Surgical masks, medical rubber gloves, tubes and other consumables, blood collection tubes, and disinfectants are stocked.

Stable supply of
antimicrobial agents that are
in short supply• We continue to manufacture and market antimicrobials, although they are unprofitable and there are concerns about the supply of APIs.
• As a precaution against the future supply of APIs, we are developing some of them in-house.

Providing a medical
environment for patients
who live in remote or are
difficult to access locations• The company sells a cloud-based monitoring system (Nipro Heart Line™) that uses ICT to provide real-time information on patients, even inremote locations.
• The system enables patients with chronic diseases to receive regular and continuous medical care, sharing vital information in real time, andsending alerts when abnormal values are detected to remotely check the patient's condition.

Enhancing the laborproductivity of healthcare
professionals• The company sells the HN LINE™, which solves business problems by linking medical device information with electronic medical records.
• The company hopes to support the reduction of labor, efficiency of nursing operations in hospitals, and work-style reforms of healthcare professionals.

Minimizing the environmental
impact of waste• The heat generated when industrial waste in the manufacturing process is burned in incinerators is reused to generate electricity and hot water,
and the company also emphasizes reducing the volume of industrial waste.
• We promote a paperless office by digitizing internal documents and eliminating meeting materials to reduce the use of paper and other materials.

Promoting efficient use ofnatural resources• To reduce the global environmental impact, the company promotes the introduction of solar power generation at its plants as part of energy
conservation efforts.
• At Nipro Thailand, a solar power generation system was introduced in 2018 and the electricity generated is used for medical device manufacturing.

Providing rewarding work
opportunities for all• Training for women in supervisory positions and above is conducted so that they can build a career design with strategies for their work and lives.
• For international students who have received job offers to seamlessly join the company, exchange meetings are held for the purpose of
networking with senior international employees prior to joining.

Related SDGsNIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section17

Investment Status of Social Bonds and Loans

Social Bond Reporting

Investm e n t S tat us o f S o c i a l B o nd s a nd Loa n s
Overview of social bonds(2) Social loan

Our business contributes to improving the health and quality of life of people around the world
through the stable supply of medical devices, pharmaceuticals, and other essential social
initiatives. We believe that these efforts contribute to solving social issues as social projects.
We have established the International Capital Markets Association (ICMA) in order to raise
funds for these initiatives as social bonds. We have established a Social Bond Framework anda Social Finance Framework* in accordance with the ICMA Social Bond Principles.
Based on this framework, we issue (1) Social CBs and (2) Social Loans to finance projects
that contribute to solving social issues.

The purpose of this loan is to allocate the raised funds to businesses that contribute to theresolution or mitigation of social issues.
The active investment in projects with high social feasibility will be realized by raisingfunds through this loan.

* The company has obtained a “second opinion” from Rating and Investment Information, Inc. as a third-party evaluation.

(1) Social CBs
Our corporate bonds are positioned as “convertible bonds” (CB) which the bondholders canconvert into our shares at a predetermined price. By setting the conversion value higher than
the stock price at the time of issuance, the issue of corporate bonds is expected to be effective
in protecting the interests of existing shareholders and maintaining financial safety. Thus, we willrealize proactive investment in projects with high social contribution.
Corporate bond
nameNipro Corporation
Euro-yen denominated convertible bond with a maturity in 2026
(social convertible bonds) “Social CB”

Issue amount¥30,000 million

Period5 years

Interest rate0%

Conversion value¥1,430

Payment date

September 27, 2021

Use of funds

Investment in manufacturing facilities of medical devices

LenderTotalborrowing(million yen)Interest
rate

Date ofborrowing

Variableinterest
rate

2022/7/29

A syndicate loan
with Aozora Bank as
an arranger

13,400A syndicate loan with
Sumitomo Mitsui
Banking Corporation as
an arranger

9,500

Fixed
interest
rate

1,000

Variableinterest
rate

A syndicate loan with
Credit Agricole as
an arranger

Nippon Life Insurance
Company

A syndicate loan with
Sumitomo Mitsui Trust
Bank as an arranger

A syndicate loan withSBI Shinsei Bank as
an arranger
Total

6,600

2,700

Collateral
Warranty

BulletBullet2032/8/31
2027/12/28

1,000

Fixed
interest
rate

2023/1/31

2,000

Fixed
interest
rate

1,000

Variableinterest
rate

7,000

Variableinterest
rate

52,0002029/7/31

2022/8/31

2022/12/28

4,700

2027/7/31

Repayment
method2027/8/31

Fixedinterest
rate

3,100

Repayment
date

2029/12/28

Bullet2032/12/28

2023/2/10

2028/1/31

2028/2/29

Installment
repayment every
3 months
Installment
repayment every
3 months
Bullet2023/2/28

2028/2/29

Installment
repayment every
3 months

No
collateralNo
warrantyContents

NIPRO Annual Report 2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section18

Investment Status of Social Bonds and Loans

Social Bond Reporting

Inve stment S ta tus o f So c i a l B o n d s a n d Lo a n s
Funding appropriation status(2) Allocation status of funds

The status of appropriation of funds is as follows.
(1) Social CB funds are scheduled to be fully allocated during the fiscal year ended
March 31, 2023 and (2) Social Loan funds have been fully allocated.

Use

Project type

Amount(million yen)

Details of allocation

New investment

International business

6,219

NVC dialyzer facilities, etc.

New investment

International business

5,605

Hefei dialyzer facilities, etc.

New investment

International business

4,582

NMC dialysis medical devices, real estate,facilities, etc. of dialysis clinic(1) Social CB updated part

New investment

International business

593

Special needle automatic assembly device
in Nipro Medical Industries

Date ofprocurement

2021/9/27

New investment

Pharmaceutical business

17,308NPP Omi Plant, Ise Plant

New investment

Pharmaceutical business

5,217

Zensei Kishiwada E Building

Amount(million yen)

30,300New investment

PP business

3,048

Expansion of tanks in NPA

New investment

PP business

6,039

NPF Pegasus Project

New investment

PP business

3,389

NPG vial production facility* Please refer to the Annual Report 2021

Use

Project typefor details on the status of appropriation of (1) Social Hybrid Bonds.

Amount(million yen)

Details of allocation

New investment

Domestic business

16,699Building Plant No. 7 associated withincreased production of PES/FB dialyzers
in the Odate Plant.

UnallocatedDomestic business

13,601

Funds raised through the Social CB will beallocated in FY03/2024 as the construction
fee and the purchase cost of equipments.

Total

52,000NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section19

Investment Status of Social Bonds and Loans

Social Bond Reporting

Inve stment S ta tus o f So c i a l B o n d s a n d Lo a n s
Progress of each project

Approach to social issues (Output indicators)

Medical-Related Business (Japan)

The funds raised were used as capital investment to meet market needs in manufacturing
medical devices, pharmaceuticals, and cellular medicines. Please note that there is a time lag
before the invested facilities become operational and the manufacturing capacity increases.

Related SDGs

Main businesses
We develop, manufacture, and market medical devices, and generic and cellular pharmaceuticals
in Japan.
Our main medical device products are dialysis products; however, we also provide products
for treating various diseases and products with safety measures. Further, we have a wide
range of our own branded generic drugs, including oral, injectable, and topical products. We offer
universally designed products, such as orally disintegrating tablets that can be swallowed
without water, tablets that can be distinguished by fingertips, and packaging that includes
a section for medication instructions and the date of administration. For cellular medicines,
we provide autologous marrow mesenchymal stem cells for the treatment of spinal cord injury.

Percentage increase in the quantity of
medical devices manufactured*1

COVID-19 still had an impact, such as the shutdown of the Shanghai
factory due to the Shanghai lockdown, but compared to the previous
year, the situation has improved. Thus, the actual production of
medical devices for Japan has increased to 101% of the previous year.

Percentage increase in the quantity of
in-house brand generics manufactured*2

The production of oral drugs had decreased in the previous year
owing to the damage to the Kagamiishi factory, but has recovered thisyear. The actual production increased to 102% of the previous year.

Manufacturing capacity of cellular
medicines

The cell medicine production capacity has remained flat at 250 since
the start of operations at Sapporo CPF.

Outcome of improvement of issues (Outcome indicators)
Target social issues• Help life support, health improvement, and quality of life for patients requiring dialysis• Prevent medical accidents such as needlesticks, foreign substances/bacterial contamination,and reduction of the burden on healthcare workers• Reduce obstacles in medication for patients with manual or visual impairments• Provide an ICT-based medical care system to patients who are unable to visit hospitals due
to disasters or residence in remote areas• Improve the health and life of patients with spinal cord injuries

Percentage increase in the quantity of
medical devices sold*1

The dialyzers continued to sell well, and the sales of winged needles
increased with the acquisition of new customers. Thus, the actual
sales increased to 101% of the previous year.

Percentage increase in the quantity of
in-house brand generics sold*2

Although the quantity increased for all dosage forms, the unit pricesof oral drugs and external-use products of larger quantities decreased
due to the NHI drug price revision. Thus, the actual sales decreased
to 94% of the previous year.

Quantity of cellular medicines sold

The acceptance of cell medicines in hospitals has increased owing to
the mitigation of COVID-19’s impact, and the actual sales havereached 28 cases.

*1 Percentage increase in the quantity of medical devices manufactured and sold was calculated by selecting themain products, dialyzers, blood circuits, dialysis needles (AVF), winged needles (PSV), and syringes. In order
to align the different unit bases, the quantity was calculated as a weighted average of unit price and comparedto the previous year.
*2 Percentage increase in the quantity of in-house brand generics manufactured and sold was calculated as aweighted average of unit price to align the different units of oral, injectable, and topical formulations comparedto the previous year.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section20

Investment Status of Social Bonds and Loans

Social Bond Reporting

Inve stment S ta tus o f So c i a l B o n d s a n d Lo a n s
Medical-Related Business (Global)

Related SDGs

Main businesses
We develop, manufacture, and sell medical devices overseas. In addition, we sell pharmaceuticalproducts, and also open and operate dialysis centers and training centers. Our main medical
device products are dialysis products; however, we also provide products for treating various
diseases and products with safety measures. Pharmaceuticals provide dialysis solutions usedin dialysis treatment. Dialysis centers are specialized clinics that provide dialysis treatment topatients. Training centers are training facilities for healthcare professionals in dialysis treatment
techniques and provide an improved on-site medical environment by incorporating feedback
and requests obtained during the training into product and technology improvements.

Approach to social issues (Output indicators)
The funds raised were used for capital investment to meet the market needs in the manufacturingof medical devices. Please note that there is a time lag before the invested facilities become
operational and the manufacturing capacity increases.

Percentage increase in the quantity of
medical devices manufactured*3

Regarding dialyzers, factories in Thailand and Vietnam resumed
operations owing to the mitigation of COVID-19’s impact. Moreover,the new lines at the Hefei factory and the India factory have started
operations. The production of other blood circuits, winged needles,and syringes increased as the demand increased. Consequently, theactual production of medical devices for overseas has increased to
109% of the previous year.

Dialysis Center patient capacity*

The market is expanding in various countries around the world, in
addition to South and Central America, which continues to expand.
A total of 28 facilities were opened this fiscal year alone, which isa 119% increase from the previous year.

Number of training centers

We have added one base in Saitama, and the number of training
centers worldwide reached 27 in this fiscal year.

4

Target social issues• Help life support, health improvement, and quality of life for patients requiring dialysis• Prevent medical accidents such as needlesticks, foreign substances/bacterial contamination,and reduction of the burden on healthcare workers• Provide medical facilities to patients living in remote regions in emerging countries• Provide advanced medical care to patients living in urban areas in developing countries• Provide therapeutic equipment, examination products, and infection control products thatcan prevent the spread of infectious diseases

Outcome of improvement of issues (Outcome indicators)
Percentage increase in the quantity of
medical devices sold*3

Dialyzers continue to sell well in North America and China, and there
was a special demand for syringes for vaccination in Canada. Thus,
the actual sales increased to 109% of the previous year.

Number of patients treated at
Dialysis Centers*4

The number of patients treated at the dialysis centers increased to118% as more centers were opened.

Number of training center users

A total of 28,374 healthcare professionals were trained at the training
centers in 27 bases around the world.

*3 Percentage increase in the quantity of medical devices manufactured and sold was calculated by selecting themain products, dialyzers, blood circuits, dialysis needles (AVF), winged needles (PSV), and syringes. In order
to align the different unit bases, the quantity was calculated as a weighted average of unit price and comparedto the previous year.
*4 Number of dialysis centers and patients treated at dialysis centers was calculated as the percentage
yearly increase.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section21

Investment Status of Social Bonds and Loans

Social Bond Reporting

Inve stment S ta tus o f So c i a l B o n d s a n d Lo a n s
Pha r mac eu tic a l - Rel a ted B us i n ess

Related SDGs

P h a r m a Pa ckaging B usine ss

Related SDGs

Main businesses
We are a contract manufacturer of ethical drugs licensed by domestic and overseas pharmaceutical companies. We have manufacturing facilities in Japan, the U.S., and Europe that are
GMP-compliant in each of the three regions. The company can manufacture a wide range of
products, including injectable, oral, and external dosage forms, from small-lot study drugs tomass production after launch. We also develop formulations, such as orally disintegratingtablets, as well as slow-release and transdermal-absorption formulations. We can manufacture
pre-filled syringes and double-chamber bags, which are combination products with medical
containers. We also handle contracted inspection and packaging processes for products
licensed overseas, where pharmaceutical companies sell pharmaceutical products formulated
overseas after inspection and packaging in Japan.

Main businesses
We develop, manufacture, and sell pharmaceutical packaging containers and glass tubing,the raw material for pharmaceutical packaging containers.
For pharmaceutical packaging containers, we provide molded components such as vials,
syringes, rubber stoppers, and devices used to administer pharmaceuticals. Packaging
containers can be customized to meet the quality requirements of products ranging fromgeneral pharmaceutical products to biopharmaceuticals and nucleic acid drugs. The raw
material, glass tubing, is a glass material that meets the standards for primary pharmaceuticalglass containers specified in the Japanese, U.S., and European Pharmacopoeias. We sellglass tubing to Japan as an agency of Nippon Electric Glass Co., Ltd. We manufacture our own
glass tubing in the United States, France, India, and China and sell it worldwide.

Target social issues• Contribute to a stable supply of pharmaceuticals by supporting a wide range of dosage
forms and production scales• Contribute to healthcare cost reduction by reducing manufacturing costs through a collective
contract of manufacturing pharmaceuticals for many companies

Target social issues• Provide essential products for pharmaceutical manufacturing, contributing to a stablesupply of pharmaceuticals and labor saving in the formulation process• Reduce the burden on healthcare professionals by developing products that meet the needsof the medical field• Contribute to the reduction of medical accidents such as mix-ups and contamination offoreign substances by creating kits of pharmaceutical products

Approach to social issues (Output indicators)
The procured funds were used as capital investment in the contract manufacturing of pharmaceutical products to meet the market needs. Please note that there is a time lag before theinvested facilities become operational and the manufacturing capacity increases.
Percentage increase in
the quantity of contract
drugs manufactured*5

Multiple new contracts were started, but for existing products, the order
quantity decreased owing to the sorting out of items at the customer side orcontract completion. Thus, the actual production remained at 100% of theprevious year.

Outcome of improvement of issues (Outcome indicators)
Percentage increase in
the quantity of contract
drugs shipped*5

Multiple new contracts were started, but for existing products, the order quantity
decreased owing to the sorting out of items at the customer side or contract
completion. Thus, the actual production remained at 100% of the previous year.

*5 Percentage increase in the quantity of contract drugs manufactured and shipped was calculated as a weighted
average of unit price to align the different units of oral, injectable, and topical formulations compared to theprevious year.

Approach to social issues (Output indicators)
The procured funds were used as capital investment to meet the market needs of manufacturing
pharmaceutical packaging containers. Please note that there is a time lag before the invested
facilities become operational and the manufacturing capacity increases.
Percentage increase in
the quantity of products
manufactured*6

The actual production decreased to 84% of the previous year’s, owing to adecrease in the demand for vaccination vials in China.

Outcome of improvement of issues (Outcome indicators)
Percentage increase in
the quantity of products sold*6

Although the overall quantity decreased, the unit price of ampules and vials oflarger quantities increased because of the weak yen, resulting in an increase in
the actual sales to 102% of the previous year.

*6 Percentage increase in the quantity of products manufactured and sold was calculated as a weighted averageof unit price to align the different units of ampoules, vials, and syringes, which are the main products, comparedto the previous year.

Contents

NIPRO Annual Report 2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

S usta inab il ity o f Ni p ro

22Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Basic attitude

Sustainability promotion system

The Nipro Group is working to promote sustainability management to resolve various social
issues through business.

The Sustainability Committee is divided into the Environment Committee, Social Committee,
and Governance Committee. They manage and promote the ESG initiatives in each businessdivision (all group companies).
The status of management and promotion is put on the agenda of the board of directors
every quarter or so. Accordingly, the strategy is discussed, guidance is provided, and KPI
setting and its progress are deliberated upon. The contents are relayed to the business division
through each committee.

Extract ESG issues

Sustainability promotion system

Construct thesupervising system
for the board of
directors

Board of directors
Official supervisor of climate change-related issues among the board of directors

President & Representative Director
Deliberation matters are put on
the agenda and deliberated upon

Appointment

Chief Sustainability Officer (CSO)

Set mid- andlong-term goals

Reform thecompany-wide
policySustainability of
Nipro

Reporting the deliberation matters

Appointment

Sustainability Committee
Information disclosure

Establish theexecutive
committee

Increase corporate value

Secretariat: Sustainability promotion dept., Human resources dept. Governance control dept.
Environmental Committee

Social Committee

Each business division

Governance CommitteeNIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Sustainability o f Ni p ro
Cases of sustainability-related initiatives
CASE 1

Reducing greenhouse gases using renewableenergy-derived electricity

Achieving CO2-free power at production bases
Private power generation using solar panels has been implemented at the Kondo Plant of Nipro
Medical Industries Co. Ltd. (Japan) since FY 2016. All power used was switched to renewableenergy-derived electricity from April 2021.
The switch to 100% renewable energy-derived
GHG emission reduction effectelectricity was the first for the Nipro Group’s(Kondo Plant): Down 4,540 t-CO2
business and production bases. At the Izumi			(As of end-March,2023)
Plant of Zensei Yakuhin Co., Ltd. (Japan),(Izumi Plant): Down 3,293 t-CO2
			(As of end-March,2023)
100% renewable energy-derived power has
been in use since FY 2022.

CASE 2Introduction of biomass boiler throughpublic-private collaboration

At the Odate Plant belonging to Nipro Pharma (Japan), a biomass boiler has been in operation
since FY2011. Accordingly, power is generated by a turbine using biomass instead of fossil fuels.
The steam produced by the biomass boiler is distributed to the plant 24 hours a day and 80%
of it is used for air-conditioning in the plant (using steam to heat the air cooled for humidity
adjustment). It is also used to produce water for sterilization of products and manufacturing
processes, leading to the reduction of GHG emissions. This project is a public-private collaboration between Nipro Pharma and Odate City for processing and distributing wood biomass using
waste wood. Nipro Pharma thus contributes tobuilding a sustainable and communal society
by participating in the project.

GHG emission reduction effect:

Down 8,324 t-CO2
	
(LNG conversion from the result as of endMarch, 2022)

Biomass boiler at Odate Plant

CASE 3

Kondo Plant

Izumi Plant

Reduction in substantial GHG emissions due to Non-Fossil Certificate
In the Nipro Group, GHG emissions werereduced by utilizing Non-Fossil Certificate withthe environmental value of CO2-free renewableenergy power.

GHG emission reduction effect:

Down 30,380 t-CO2
	(based on the results of the purchase with
Non-fossil certificate for FY 2022)

23

Opening of dialysis centers in emerging countries

We have opened dialysis clinics in suburban
areas for patients who live far from the city,
particularly in South and Central America
and emerging countries, so that dialysis
therapy is conveniently provided to everyone.
We have also opened dialysis centers incities in Southeast Asia and Africa to provide
high-quality treatment. We aim to keep
introducing our dialysis centers in emerging
countries, providing high-quality products andtreatment environments, thus contributing
to community medicine.

Dialysis center opened in Thailand

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

E nviro nme n t

24Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Information disclosure based on TCFD

Risk management

The Nipro Group recognizes that climate change is a significant issue that greatly affects
business continuity. The Nipro Group agrees with the suggestions of the Task Force on
Climate-related Financial Disclosures (TCFD), made in June 2023, and will expand information
disclosure following the framework proposed by TCFD.

The Nipro Group has formulated the “Regulations on Disaster Prevention and Crisis Management”
and “Regulations on Compliance Promotion” to accurately grasp management risks that
could have major impacts on the business—including climate-related risks—and to makeefforts for appropriate corporate management. In addition, if the estimated risk exceeds acertain threshold, the Board of Directors is engaged to promptly make decisions regarding
risk management.

GovernanceIn the Nipro Group, the President serves as a supervising officer of climate change issues.
Our CFO was designated as chairman of “the Environment Committee” by the President andmanages and supervises the initiatives for climate change issues at the Nipro Group.
In the Environment Committee, the persons in charge of climate change issues in eachbusiness division serve as committee members who identify the impact of climate change on
the Nipro Group and examine the policy initiatives and specific measures. The measures
examined by the committee are put on the agenda of the board of directors through thechairman of the committee and deliberated as a significant management issue of the Nipro Group.
The Nipro Group makes a quick decision on the management related to climate change
issues by introducing the aforementioned committee system and improves the system towork on the measures.

Index and goals
The Nipro Group decided the volume of greenhouse gas emissions (unit: t-CO2) as an index
for the evaluation and management of risks related to climate change. Furthermore, to promote
the reduction of greenhouse gas emissions, the Nipro Group aims for Net Zero in Scope 1/2
by 2045. As an interim goal, the Nipro Group aims for a reduction of 37.8% in Scope 1/2 by2030 compared to 2021.
Volume of greenhouse gas emissions (t-CO2)

Approx.

534,000 t-CO

2

Reduce byStrategy
The impact of climate change on the Nipro Group is divided into the following two types: oneis related to the “transfer” caused by political impact generated in the course of societal
change toward carbon neutrality and establishment of new technologies as well as thechange in market needs; the other is related to “physical change” such as frequent abnormal
weather caused by increasing global warming, occurrence of subsequent disasters, andhigher average temperatures. The Nipro Group, a comprehensive medical manufacturer,
analyzes these impacts from the perspective of each business division, identifies risks
and opportunities, and incorporates them into the business strategy. The following page
describes a part of our strategy.

37.8% by 2030

(from 2021)

2021(reference year)

2030

2045
Net Zero* Since we reviewed the calculation methods—such as that involving the exclusion of HCFC from the calculation
target when totaling greenhouse gases in the current fiscal year—a difference between the value in the annual
report of the last fiscal year and the current value has been noted (approximately 600,000 t-CO2).

Contents

NIPRO Annual Report 2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Environment

25Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Results of scenario analysis
Risk
Category

Risk items

Impact on business

Degree ofimpactPeriodMeasures

Major

Mid-term

Implementing energy-saving measures and promoting renewable energy usage toreduce GHG emission volume at production bases where a large volume of GHG isemitted through operations.

Increase in carbon price

Increase in the costs of energy and raw materials at plants
and business offices due to introduction and reinforcement ofcarbon tax.

Change in customer
behavior due to increasing
environmental awarenessDecrease in sales due to loss of sales opportunities anddecreasing demands. As the demand for environmentally friendly
products increases, it is difficult to switch to alternative materials.

Moderate

Long-term

We are reducing GHG emissions by making existing products smaller and lighter andproduction processes more efficient. We have simplified packaging while securing
quality and changed the packaging material to low-carbon materials for someproducts. We will further develop products using environmentally friendly materials
and use low-carbon materials for product packaging.

Occurrence of disaster due
to abnormal weather

Decrease in supplied quantity due to the damage caused bydisasters to production facilities, logistical problems caused bydisasters, and stagnating supply of materials when abnormal
weather increasingly causes the occurrence of disasters.

MajorLong-term

Formulating, maintaining, and managing BCP assuming abnormal weather.
Constructing the production bases and implementing measures for disasters after
considering the system for various disaster risks (having private power generation
facility, stockpiling energy and food, having a sufficient stock of raw materials).

Opportunity items

Impact on business

Degree ofimpactPeriodMeasures

Efficiencyof materials

Reducing indirect
expenses through efficientlogistic processes

Leading to cost reduction by strengthening control of the amountof materials and logistics processes and opportunities toimplement efficient transportation and improvement in quality.

Moderate

Mid-term

Reviewing the logistics route and transport fees in Japan and overseas, placing
logistics bases at appropriate locations, and maintaining the appropriate amount ofstock. The appropriate amount of stock contributes to reducing the expenses forstorage and transport and amount of disposal.

Products andservices

Increase in supply volume
to respond to the demandsof consumers

Increase in opportunities to provide products that respondto greater interest and demand for infection prevention
among consumers. This demand has arisen after the outbreakof new infections or long-term disease trends associated withclimate change.

Great

Long-term

To fulfill the responsibility of supplying products to clinical settings during the
expansion of demand for the related products, establishing a system for quickly
increasing production volume, and supplying products to respond to the globally
expanding demands by determining the level of stock of products that is decided tobe necessarily higher than that for other products.

Products andservices

Increase in demand of
products to respond to
greater environmental
awareness

Leading to an increase in the sales of home care products, which
is motivated by greater demand for home care products that do
not emit GHG associated with transport.

Minor

Long-term

Promoting research and development while gathering information on
customers’ demands.

Transfer risk
(1.5⁰C scenario)

Physical risk
(4⁰C scenario)

Opportunity
CategoryNIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Sustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Huma n Re s o urc e s S tra te g y“Willingness” is the corporate creed of the Nipro Group. Working on all activities with“willingness” is fundamental for employees. We aim to establish an environment wherein
employees from diverse backgrounds can achieve their goals so that we can firmly maintainthe corporate culture of giving opportunities to all personnel with willingness.
Promotion of Health Management
Nipro is promoting health management to realize the management philosophy of “supporting
the health of people around the world and contributing to society.” Health management aims
to improve employees’ health in a company that supports healthcare, enhances productivity,and contributes to society through sustainable growth. To achieve these objectives, the HealthManagement Promotion Committee was organized, headed by the executive in-charge of the
Human Resources Division, and various issues were discussed with members selected fromeach division. The Committee is taking steps such as holding seminars to enhance employees’
health literacy and introducing health apps regarding particularly significant issues, such as
smoking cessation, mental health, and the activation of workplace activities. Moreover, we
strive to establish a system through which employees can seek health advice and improve their
daily support by cooperating with industrial health professionals such as industrial physiciansin each region.
Promotion System
President
Department that supervises
health management promotion(Secretariat: Human
Resources Department)

Chief Health Officer (Director of
the Human Resources Division)

Health Management
Promotion Committee

Financial/Data
SectionCooperation

26

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

and holds an in-house event, “FISH Festival/
FISH Award,” to introduce and recognize FISH
activities at each business office/plant, etc.
Based on these initiatives, we aim to further
disseminate the FISH! philosophy, facilitatecommunication among employees, and improve
workplace environments.
Nipro Group Mutual Aid Association
The Nipro Group Mutual Aid Association operates for the purpose of mutual aid of members,
improving the culture and health of members, and promoting mutual friendship between
members. Further, the Association contributes to stimulating social interactions between
members, promoting health through various event activities at branches established in eachbusiness office, and implementing nationwide sports events.
As a unique system, the Association provides subsidies for expenses for complete medical
checkups, lifestyle disease prevention screening, gynecological screening, and smoking cessation
outpatient visits; supports members who have taken long-term absence from work for familycare and childcare with benefits; and provides subsidies for expenses for members who arereceiving fertility treatment.
It has a system where members can use sports facilities, childcare, and nursing care services,among others, at preferential prices. Also, the “Cafeteria Plan” system is adopted for further
assistance with health, childcare, and nursing care. It contributes to maintaining mental andphysical fitness according to the needs of individual employees and supports the balance
between work and family life. Thus, the Association aims to improve employee satisfaction.

Cooperation
Industrial doctor

Employees, etc.

Initiatives for enhancing employee engagement
The Nipro Group promotes the FISH! philosophy as action guidelines for working people.
The FISH! philosophy consists of four principles: “Choose Your Attitude,” “Play,” “Be There,” and “Make
Their Day.” In the concept, people are inspired to be “willing to work” and create a comfortableand vibrant workplace environment by involving people around them and acknowledging theirideas. The Nipro Group has also been promoting the use of the FISH! philosophy company-wide

Completion of construction of the new head office of Nipro Pharma Corporation
In the new building completed in March
2023, we have allocated spaces to further
activate the communication among employees, such as a co-creation space and relaxation room with the concept of “encountering,connecting, and creating,” being aware of
the FISH! philosophy.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Hum an Resourc es Stra teg yAppointment of positions with transparency and promotion of personnel exchanges within
the Group

As these training sessions are conducted by the Nipro Group, employees of groupcompanies can also participate. Sharing the values of group companies with various backgrounds
helps increase the brand value of Nipro and the entire Nipro Group.

Education and Training System
Class AClass HClass M

GeneralSupervisor

ManagerTraining before
joining the company
Training for
new employees

Test

Self-development

Class F
Assistantsupervisor
Test

Training by specialty(Implemented by eachbusiness division)

The Nipro Group provides unique training sessions for young employees. During training
sessions, many programs required communication with peers who joined the company in thesame year. Thus, training not only enhances willingness and increases knowledge but also
creates opportunities to deepen interaction between peers, which leads to a decreased turnover rate. Furthermore, we provide stratified education to management positions in the firstyear of appointment or at an early stage. Thus, employees can understand the mission of theirposition and increase their engagement with the company.

Company-wide common training(group common training)

Stratified education for young employees and employees promoted to management positions

Class C

Test

Cultivating language skills and supporting self-development learning
Acquiring skills in languages other than Japanese is essential when moving forward to the global
market of eight billion people in the borderless era. Therefore, we provide English education
programs to select employees and create opportunities to enhance their language skills.
The Nipro Group is actively expanding group training based on the belief that “growth isexpected only through communication”, and we have attempted to deepen communication.
However, we also provided online training to supplement the group training. Employees canfreely apply for self-development learning on a topic that meets their needs in an a la cartemanner. In addition to the language education courses described above, DX-related courses,
PC skill courses, and various other skill development courses are available throughout
the year. Therefore, willing employees can improve their level by voluntarily attending courses,
and the company will assist with the expenses for those who have finished the courses.

Class B

New graduate class
Training common to Training common
Ability
Careereach hierarchicalto thedevelopmenttraining
group
management staff
training

The Nipro Group is working on personnel promotion free from the order of seniority under thecompany creed “Willingness” to achieve Group sales of 1 trillion yen for the fiscal year ending
March 2031. By renovating the personnel system and clarifying the criteria for promotion, moretransparent personnel treatment has been implemented, improving the willingness of all employees.
We will further expand the internal job-posting system in the future to enable employees to comeforward for personnel transfer in anticipation of career development within the Nipro Group.
Essentially, we aim to remove the barriers to personnel transfer and allocate the right person to
the right job, beyond the borders of companies by unifying the personnel system within the Group.

27

Follow-up training
Step-up training
Training for upgrading
Training for
new assistantsupervisors

Training fornewsupervisors

Training fornewmanagers
Training forseniormanagers

Female career training
Senior career training

Selective English training
Nursing training

Basic training and learningfor MR

Advance training and learning for MR

Training for new employeesby specialty

Training for employees by specialty

Establishment of correspondence education courses

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Hum an Resourc es Stra teg y28Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Promotion of active participation of women

Promotion of active participation of senior human resources

In the Nipro Group, we aim to provide a comfortable work environment for all employees,
regardless of gender. In particular, we are working energetically to promote the active
participation of women and support the development of the next generation. Nipro has set specificgoals of increasing the proportion of women in management positions to 10% or more by 2027
and increasing the proportion of male employees taking childcare leave to 30% or more.
We are taking various steps to achieve these goals, such as holding round-table discussions
with female managers and female career support seminars to develop work careers vibrantly
and energetically without frustration.

A decrease in the working population due to a declining birth rate and an aging population isan unavoidable issue in Japan. Nipro extended the mandatory retirement age to 65 years on
October 1, 2022, to secure labor and enhance senior engagement. We prevent early retirement
by guaranteeing the employment of senior employees, extending the mandatory retirementage, and introducing senior career training. Thus, we foster positive career self-reliance, support
the handing down of knowledge and technology to younger generations, and contribute to
the Nipro Group’s development.
Support for caregivers

PICK UP

Support for childcare employees
The Nipro Group provides careful support to employees who have returned to work after childcare
leave. We support the balance between work and childcare by allowing short working hours untilchildren reach the 6th grade of elementary school, which prevents turnover. In addition, in-housenursery centers have been established in Akita, Mie, and Shiga prefectures to contribute to the earlyreinstatement of employees. We also encourage male employees to take childcare leave, and thenumber of male employees who have taken leave has dramatically increased over the last few years.
In addition, we have established maternity leave and nursing leave for male employees, apart fromchildcare leave. Therefore, this study focused on childcare support.

Odate City, Akita(Nipro Odate Plant,
Nipro Pharma Odate Plant)

Matsusaka City, Mie(Ise Plant, Nipro Pharma
Corporation)

Kusatsu City, Shiga(NIPRO Life Science Site)

The fact that employees of the working generation become caregivers is a problem thatcannot be avoided because of nuclear families. The Nipro Group has a system in which theperiod of nursing care leave is significantly longer than that stipulated by law, and short working
hours and telework are available. These efforts have contributed to the prevention of nursing
care turnover.
Flexible work style—Flex system, telework system, staggered working hours system
The flex system has been introduced in some job types to realize a work style that has flexible
working hours and contributes to maintaining mental and physical health. In addition, we
have indroduced a telework system, a work style not restricted to a space, using the COVID-19
pandemic as an opportunity. Thus, we attempted to improve labor productivity while improving
mental care. However, since we think that innovation will be generated through face-to-facecommunication, we set a maximum limit for the frequency of teleworking and required
employees to work at the office two days a week. Furthermore, we introduced a staggered
working hours system for up to 60 minutes which contributed to improving work-life balance.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Hum an Resourc es Stra teg y
PICK UP

Data

Various systems to realize work-life balance*1 Scope: Nipro Corporation• Maternity leave• Long-term absence from workfor childcare• Childbirth leave system for male
employees• Long-term absence from workfor childcare for male employees• Short working hours systemfor childcare• Staggered working hours system• Menstrual leave• Hospital visit leave during
pregnancy• Maternity health checkup leave• Morning sickness leave• Birth support leave• Child nursing leave• Long-term absence from workfor nursing care
• Nursing care leave system• Short working hours system fornursing care
• Job Return Program for resigned
employees• Telework system• Flex system• Opening of nursery centers inthe business offices (3 centers in
the Group)[Related to the Mutual Aid Association]
Various support systems: subsidies for fertility treatment, benefits for reinstatement from childcare
leave, and subsidies for gynecological screening
Maternity celebration system, childbirth celebration system, breast cancer self-check support
system, etc.

Job Return Program
To make the most of the know-how cultivated in Nipro, we introduced a system that allows
those who resigned from the company due to unavoidable reasons such as transfer of the
spouse, childcare, or nursing care to re-join the company after the circumstance is resolved.
Employees can use this system to dedicate themselves to issues at home with peace of mind.
After the issues are resolved, they can re-join the company, which contributes to harmonization
between work and home life.
Safety and health
The Nipro Group aims to establish a safe and hygienic working environment by complying withlaws and regulations related to health and safety and in-house regulations, setting a basic
policy to eliminate industrial accidents, prevent diseases, maintain and promote health, andensure safety and health management.

29*2 Scope: Nipro Group (Domestic Companies)

Promoting Health Management
Employee smoking rate

*1

FY 2021
22.6

FY 2022
21.5

Goals
15.0

FY 2021

FY 2022

Goals

51.1

51.1

55.0

Improve Employee Engagement
Employee work engagement*3*1*3 Employee work engagement represents a positive psychological state toward an individual’s work and isindicated by a deviation value. In this survey, the mean value was 49.3, and the highest value was 56.2 in theentire manufacturing business.

Promoting Womens Participation in the Workplace
*1
*2
*1
*2

FY 2021
26.3
33.2
4.3
5.8

FY 2022
27.2
32.2
4.7
6.5

Goals
—
—
10
10

Percentage of female employees
taking long-term absence fromwork for childcare
Percentage of male employees
taking long-term absence fromwork for childcare

*1

100

100

100

*2

100

100

100

*1

16.7

28.2

30

*2

12.8

27.3

30

Employees with short working
hours for childcare

*1

97

105

—

*2

249

280

—

Percentage of female employees
Percentage of female managers

Support to Caregivers
Employees with short working
hours for nursing care

*1
*2

FY 2021
3
10

FY 20222
10

Employees taking long-term
absences from work for nursing care

*1

6

5

Employees’ health and safety

Frequency of work accidents
Work accident severity rate

*1
*2
*1
*2

FY 2021
0.49
0.72
0.010
0.009

FY 2022
0.35
1.01
0.015
0.014

Goals
0.16
—
0.005
—

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Res ea rc h an d Deve l o p m e nt Ac ti v i ti e sContributing to Innovation in Medical Care through Original Technologies
and Ideas
Nipro has seven research and development sites, centered on the Research and Development
Institute and Pharmaceutical Research Laboratories in Japan and the United States.
We continually address the needs and issues of medical professionals and patients as
we work to develop and provide high-value-added products.

01 02 03

02

Kusatsu-Shi, Shiga

Kasukabe-shi, Saitama
Kawagoe-shi, Saitama

Research themes⦁ Cellular and regenerative medicine
products
⦁ Orthopedic surgery-related products⦁ Dialysis-related and general
medical devices
⦁ Circulatory organ- andintervention-related products⦁ Artificial organs
⦁ Test and diagnosis-related products
⦁ High-performance medical containers⦁ Medical glass products
⦁ Software as a Medical Device

Status of industry-academia
collaboration
Implementation of research aimed at thejoint development and early realizationof new products, in collaboration with
universities and research institutions
throughout the world.

07
Massachusetts, USA

02

06

182

41

Research themes

Research themes⦁ Injectable drugs
⦁ Oral drugs
⦁ External-use drugs
⦁ Biosimilar drugs
⦁ High-performance medical drugs

⦁ Vascular retrieval system⦁ Neurovascular/peripheral coils
⦁ Peripheral Atherectomy
⦁ Specialty coronary/peripheral DES

Number of employees

258

06
California, USA

05 Seto-Shi, Aichi

AVANTEC VASCULARCORPORATION

Number of employees

Research andDevelopment InstituteIntellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

04 Sapporo-Shi, Hokkaido

Pharmaceutical
Research Laboratories

0130

Number of employees

04

05

36

70

Research themes

Research themes

Manufacture of investigational new drug
and development of equipment andconsumables for the realization ofregenerative medicine using autologous
bone marrow cells for strokes, spinal
cord injuries and other diseases.

⦁ Catheters and accessories for cardiac
and circulatory organ inspection andtherapy⦁ Catheters and stents for cerebral bloodvessel therapy
⦁ Vascular access catheters

Status of industry-academia
collaboration

Status of industry-academia
collaboration

Conclusion of collaboration research
agreement concerning strokes, spinal
cord injuries and other diseases, andlicense agreement on regenerative
medicine patents with Sapporo Medical
University.

⦁ In December 2021, started a companyled clinical trial in collaboration with
National Cerebral and CardiovascularCenter.
⦁ Implementation of research incollaboration with Hiroshima University

Regenerative Medicine
R&D Center

Number of employees

03

Production Technology
CenterNumber of employees

67
Research themes
The establishment of new production
technology and the design anddevelopment of equipment to increase
production, in order to enhance productivity.

Goodman Medical
Innovation Center

Number of employees

07

Infraredx, Inc.

Number of employees

64
Research themes
⦁ NIRS+IVUS intravascular imaging
⦁ AI detection and prediction algorithms
⦁ Optical physiological measurements
⦁ Plaque characterization algorithms
⦁ Optical detection algorithms

Status of industry-academia
collaboration
⦁ Imperial College London
⦁ Queen Mary University of London
⦁ University of TokyoNIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Re se arch and Devel o p men t Ac ti vi ti e s
The activities for research and development (R&D) of medical devices and drugs are mainly
conducted by our company at NIPRO Life Science Site in Kusatsu City, Shiga Prefecture.
In the medical-related business, by effectively utilizing management resources andour unique technology, we work on investing in safer and more valuable products from theuser's perspective, such as next-generation safety blood sampling needles.
As well as improving the quality of life (QOL) of healthcare professionals and creating andenhancing new medical products, we will focus on conducting profitable research anddevelopment.
In the pharmaceutical-related business, we are developing high-quality generic drugs,
targeting brand-name drugs in various disease areas and dosage forms to meet the needs for
drug costs reduction and to improve the quality of medical care. We are also focusing on thedevelopment of value-added products, such as orally disintegrating tablets, which are easy
for patients to consume, and kit preparations that are easy to handle in medical settings.
Total R&D costs for the current consolidated fiscal year is 19,669 million yen.
The R&D activities for each segment are as follows:

1. Medical-related Business
The following R&D activities are conducted mainly at the Research and Development
Institute and Enzyme Center.

Division of General-purpose Medical Development
There was an opinion in the enteral nutrition field that the new standard (ISO80369-3) connector
was prone to becoming dirty. In response to this issue, we marketed the “EN Slide Feeding
Catheter” (vinyl chloride) and the “Feeding Tube Clear” (polyurethane) with easy-to-wipe
shapes. We also marketed the “Dosing adaptor for collected liquid for neonates,” which isconnected to a syringe conforming to the standard (ISO80369-3) and enables the provisionof milk, and other necessities safely without hurting the oral cavity of the neonates. Additionally,
we marketed the “Nipro saliva suction tube,” which is placed in the patient’s mouth duringendoscopy to continuously aspirate saliva without an assistant.
Division of Artificial Organ (Dialysis) Development
We have obtained approval and plan to launch a new oxygenator, which has good operability
and a coated arterial filter that prevents platelet adhesion. Furthermore, we changed theinner diameter of the hollow fiber membrane of the current product “Hemodiafilter maxiflux®
MFX®-S eco series” and marketed the “Hemodiafilter maxiflux® MFX®-SW eco series” for31Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

more detailed treatment according to the disease condition of each dialysis patient. In addition
to the current products TA1 and TA3, Lympack dialysate TA5 was developed as the third drug
product to meet new market needs. Furthermore, Lympack TA5 was designed to have anintermediate calcium concentration between that of existing drug products when prepared asa dialysate. It is characterized by higher magnesium and glucose concentration and lower
acetic acid concentration than existing products.
Division of Diagnostics, Test Agents, and Enzyme Development
We released “Nipro FS Next,” a self-monitoring blood glucose meter, the license of which we
accepted from another company and was developed by Nipro. We also started the sale of“Nipro CareFast Pro,” a blood glucose meter for clinical tests that can record its data in theelectronic medical records by linking with systems such as the HN LINE. We plan to market
two items: COVID-19 antigen test kits for medical as well as home use, and measurement
reagents in special health examinations for organic solvent users.
Furthermore, we have been developing aprotinin, which is a kind of protease inhibitor, as
an additive for vacuum blood collection tube, Neotube, to reduce the cost and to ensure its
stable supply by replacing current material of bovine origin.
Division of Functional Pharmaceutical Containers
We sell single-use bags as clean containers for cell culture, drug preparation, and drug
storage. We also sell products that are compatible with extractable tests and USP Class 6 forbiopharmaceutical manufacturers.
Division of Surgical Devices
We sell drill bars that can be used for endoscopic treatment of not only the spine but also
joints, and we are promoting joint development with universities to increase the productlineup. The motor unit of the drill has a semi-disposable design, and is intended to be easy touse for doctors performing endoscopic spine treatment.
In addition, we have sold reusable forceps that are used to endoscopically remove hernia
tissue, ligamentum flavum, etc. for lumbar hernias. These forceps are durable and lightweightby adopting super engineering plastic materials for the handles, and this enables the forceps
to be sterilized multiple times and controlled easily. We have also developed forceps that can beused for small joints in hand surgeries and so on. The direction of the cut surface of this forceps canbe changed by a ratchet-based rotation mechanism, making it possible to use a single forceps
at various angles, saving the trouble of cleaning and maintenance. We have also succeededin reducing the weight by adopting super engineering plastics, and are promoting sales.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
Reporting

Re se arch and Devel o p men t Ac ti vi ti e s

We have launched a double-angle endoscope for diagnosing the swallowing function andpreventing aspiration of elderly people. With this endoscope, it is now possible to observe thecondition of the posterior wall of the trachea, which was previously a blind spot, using thetwo-stage (double) angle. In addition, increased intraocular pressure, which is the cause ofglaucoma, occurs when the trabecular fibers in the marginal angle of the eye lens become
clogged and block the flow of interstitial fluid. For this reason, we are working with a university
to develop a small-diameter endoscope with a bent tip so that we can perform the procedurefor incising the trabecular fibrosis while observing the angle endoscopically. We will introduce
devices for new glaucoma procedures such as those mentioned above to the market.
Division of Cell Therapy Development
We marketed a 5 mL type for a closed cryopreservation container, the “Froze Tube,” that reduces
contamination risk during cryopreservation of cells, and a collection tube for Oligozoospermia“SFNT-P,” a fertility treatment device that enables the collection of sperm of patients with low
sperm counts by centrifugal concentration.
Software as a Medical Device Development Division
Last year, we organized the MDx Laboratory for the purpose of developing programmable
medical devices that support diagnosis and treatment. In our laboratory, we are promoting
joint research and exploring new themes with a view to develop not only SaMD (Software as a
Medical Device) but also software of non-SaMD that works with SaMD.
Division of Medical Training
iMEP (medical training division) was established in Japan nine years ago. The number of usersof the facilities has not increased owing to COVID-19.
However, the relaxation of COVID-19 restrictions led to iMEP overseas (Belgium) inviting
many foreign healthcare professionals, and the number of professionals using these facilities
has been steadily increasing.
Physicians from about 10 countries, including neighboring countries such as neighboring
Belgium and the Netherlands, and some African countries, participated in hands-on dialysis
catheter placement training. Cadaveric training for dialysis shunt graft production was highly
evaluated by participating vascular surgeons.
We will organize training sessions on shunt PTA using the newly constructed X-ray training
room, vascular mapping under ultrasound, and intensive care and cardiovascular areas will beheld in sequence.
The R&D cost for this project is 9,235 million yen.

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Division of Endoscope Development

Management
Foundation

32

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

2. Pharmaceutical-related Business
The following R&D activities are mainly conducted at the Pharmaceutical ResearchLaboratories.

Injectable Drugs
We are actively developing kit preparations to improve convenience in medical settings, inaddition to the usual vial products and bag drug products. We are the only generic company
to have developed and already marketed double-chambered pre-filled syringes for leuprorelin
acetate for the treatment of prostate cancer and premenopausal breast cancer. We focusedon products that are difficult to develop, such as extended-release injectable drugs.
During this period, we have launched a generic drug with one prefilled syringe drug product.
Oral Drugs
We are currently developing exceedingly difficult extended-release drug products in addition
to common oral drugs (e.g., tablets and granules). In addition, we provided products withingredient names printed on tablets and carefully designed packaging specifications, such asindividual packages and aluminum pillow packages, to improve convenience in medical settings.
In this fiscal year, we have launched generic drugs with four ingredients and eight items(excluding authorized generics).
External Use Products
We are currently developing generic drugs for adhesives and ointments that comprise mostof our own technologies. We are developing broad-spectrum disinfectants that are effective
against COVID-19 and emerging infectious diseases. We have already started collaboratingwith many universities and research institutes in Japan and overseas to evaluate the effectivenessof disinfectants.
In this fiscal year, we have launched a generic drug product with one ingredient and one
gargling drug product.
Biosimilars
Although the biopharmaceutical market in Japan is rapidly expanding, it is generally expensive.
Thus, the need for biosimilars at lower prices is increasing from the perspective of reducing
medical expenses. Considering this, we are developing products in several styles, including
joint and independent in-house developments.
The R&D cost for this project is 10,433 million yen.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

In tellec tu al P ro p e r ty Inve stm e nt
Introduction
We regard intellectual properties and intangible assets as important management resources
and work on “intellectual property management” every day through the practice of thisintellectual property philosophy: respecting the intellectual properties of others, not releasing products that violate the intellectual properties of others, and making efforts to develop
products based on original intellectual properties.
The Business Planning, Research and Development, and Intellectual Property divisions,employing the spirit of “ONE NIPRO”, are involved in all business processes, from management
and business planning and research and development to production and sales activities.
They aim to earn 1 trillion yen in consolidated sales for March 2031 by focusing on “the user’s
viewpoint/patient’s viewpoint” and “the contribution to management (business)”, while
integrating each department’s strategy.

Management/
businessplanning

33

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

In intellectual property management, a dedicated system assigns the Intellectual Property
Division staff members for each planning and development project. The Business Planning,
Research and Development, and Intellectual Property divisions work together to plan andimplement strategies for the discovery of inventions, the application, acquisition, and exerciseof rights, the invalidation of rights of other companies, and the protection of know-how frombusiness planning to commercialization to post-marketing activities.
The intellectual property audit system* has been introduced (as an internal system) toensure our intellectual property philosophy (respect for the intellectual properties of others).
* The intellectual property audit system is a voluntary system that establishes multiple checkpoints in theprocesses of business planning and research and development; the three divisions (Business Planning, Researchand Development, and Intellectual Property) check their own intellectual property clearance.
• If an issue is identified during an audit (at a checkpoint), the project cannot proceed, and the issue has to beresolved through changes (the project can proceed only if there are no issues or if the issue can be resolved).
• If this issue cannot be resolved, the project will be discontinued. In this operation, an intellectual property
audit contributes to shortening the development period and controlling costs.

At present, in addition to the major domestic group companies, the intellectual property
audit system has been introduced to overseas subsidiaries while considering the situationsof the countries and companies. The Group is working together to “practice intellectual
property management”, focusing on “the user’s viewpoint/patient’s viewpoint” and “thecontribution to management (business)”.
Outline of intellectual property audit system (linked to development phase)

User’s viewpoint/patient’s viewpointand contribution to
management (business)

R&D expenses

Businessplanning(start)Business Planning Division/
Research andDevelopment Division/
Intellectual Property
Division

Production andsales activities

ONE NIPROIntellectual
propertyaudit

1

PassedR&D expenses

Development
phase

1

Intellectual
Development
property
phase
audit
PassednDiscontinuation of development

Research anddevelopmentn

Manufacturing

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Inte llec tu al P ro p er ty Investmen tIntellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Brand Protection Activities: Protection of Trademarks and Domain Names

Encouragement of Creative Activities such as Inventions:

To ensure reassurance and safety to customers around the world, we globally registeredmany trademarks, including “NIPRO” (filing applications/licensing in more than 100 countries
and regions in the world).
We also globally monitor the registration and use of confusing trademarks and domainnames including “NIPRO” by third parties. Additionally, we take legal measures such assuspending the use of trademarks and domain names employed for illegal acts to protect
customers’ and brands’ confidence and trust.

Proposal of Inventions and Reward Systems

Protection of trademark
and domain name34

To encourage creative activities, such as inventions that can act as a bridge to the next
generation of management (business), our employee invention system has the following
characteristics:• In addition to the extraction (discovery) of intellectual property and intangible assets, including
inventions, employees can actively conduct creative activities and propose results to the company.
• If an employee files an application for an invention and the rights are acquired (in the case of knowhow, certification of know-how) and the degree of the invention’s contribution to management(business) is high, a monetary incentive will be paid to the inventor, etc., in accordance with the
integrated rules of the Group.

Employee Invention System• Extraction of intellectual properties
and intangible assets (discovery)• Proactive creative activities

Asia
EuropeAfricaUnited States
Employees

Increasing motivation

Human Capital Development: Training on Intellectual Properties
We provide intellectual property training to the Business Planning, Research and Development,
and Production divisions, according to the level required by each occupational function toensure that each employee is motivated to participate in “intellectual property management”
based on our intellectual property philosophy.

Payment of reward to inventors, etc.,
according to the degree of contributionof inventions, etc., to management(business)

Our Group

Energizing R&D

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Sustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

S tatus o f Co r p o ra te G ove r na nc e
1. Corporate Governance System(1) Corporate Governance System and Reasons for Adoption
In our company’s corporate governance system, we have established the General Meeting of
Shareholders and Directors, as stipulated in the Companies Act, as well as the Board of Directors,
auditors, Board of Auditors, and accounting auditors. We have improved the internal committee
system, including both the Compliance Committee and Disciplinary Committee, cooperatingclosely with professional external advisory bodies and corporate lawyers. Therefore, we havebuilt a system to effectively monitor and supervise the execution of proper and efficient operations
for the overall management of the company.
(2) Internal Control Systems
We strive to build internal controls for the entire Group that relies on a divisional system. At theBoard of Directors meeting (held at least once a month) and the group management meeting(held on the same day), representatives of major companies in the Group, in addition to ourdirectors and auditors, are present to report on the progress of business activities, make decisions
on the execution of important operations, and to deliberate on matters of concern. We haveestablished the “Nipro Code of Practice” to raise awareness of legal and corporate ethics forofficers and employees and to keep everyone informed and up to date with the business.
We have also prepared various manuals on compliance covering the concerning laws and regulations, have posted them on our portal site, and have collected and handled risk information byintroducing a whistleblowing system, organizing compliance workshops, and distributing
compliance newsletters to officers and employees on a monthly basis. Thus, we are able todisseminate and promote awareness-raising activities. These internal control systems operate
based on a uniform management system for the officers and employees of each group throughclose mutual cooperation.

Financial/Data
Section

35

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members(3) Risk Management System
We have built a whistleblowing system to prevent the occurrence of risks that may havea significant impact on business management and have established the “Regulations on
Compliance Promotion” for rapid and effective operations concerning the investigation offacts if any risk arises, to find the cause, and to prevent its recurrence. Detailed operationalrules have been established for the system and its maintenance to prevent and enable theearly detection of compliance risks and prevent their recurrence. We have established aCompliance Committee to promote company-wide operations across the Group and strive tocreate a malleable system that enables flexible responses to compliance risks. Through thissystem, an illegal act will be deliberated upon by the Disciplinary Committee in an independentcapacity. This committee will be composed of multiple senior managers or external personnel
suitable for considering the form of the illegal act, the maliciousness thereof, cause for regret,and the promotion of a willingness to make serious efforts to prevent repeated offenses —along with various other circumstances based on a detailed investigation led by the Legal
Department. Finally, the President will determine the details of the disciplinary actions basedon the results of the deliberation. We strive to ensure the soundness of management with
an awareness of compliance, credibility, and punishment through these proper operatingprocedures. In addition, we have prepared the “Nipro Disaster Prevention Crisis Management
Handbook” and have distributed it to all employees in the Group through the intranet. We haveformulated a plan for each footing based on a company-wide business continuity plan to act
calmly and appropriately in the event of disasters such as typhoons, floods, and the spread of
new types of influenza, in addition to large-scale earthquakes — such as the Nankai TroughEarthquake. We duly review, if necessary, and update and inform all employees of any
improvements to the plan. Furthermore, we have established a Compliance Section in the
Legal Department to strengthen the nationwide expansion of compliance training and toenhance the risk management system. Thus, we have ensured that all employees are aware ofcompliance. We have also ensured the trust of employees and have further strengthened thecompliance system by establishing whistleblowing contacts for employees with an external
law firm, in addition to the contact point available on the internal intranet.

Contents

NIPRO Annual Report 2023

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Sustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Status of Cor p o ra te Gover na nc e

(as of July 1, 2023)
General meeting of the shareholders(Appointment and dismissal)(Consultation)(Report)(Selection, appointment,
supervision)(Cooperation)(Discussion,
reporting)(Instructions)Group Management Meeting

Execution of operations

President &Representative
Director
Executive Officer
Business divisions

Accounting
Auditor(Audit)(Instructions)(Instructions)(Reporting)(Accounting
audit)(Reporting)

Audit Office(Internal audit)(Whistleblowing)(1) Internal Auditing
We have established the Audit Office and the Overseas Audit Office as the Internal Audit Divisionand continue to conduct audits of accounting, operations, etc., required in the current corporate
governance system. This is achieved by working in close cooperation with accounting auditors,
auditors, and outside directors — in accordance with Internal Audit Regulations.
(2) Statutory Auditing(Cooperation)

Employees

At our workplaces in Japan, we are improving our systems for disaster preparation and smooth
continuity of business in the face of risks such as outbreaks of new types of influenza andlarge-scale natural disasters, including major (around magnitude 6) earthquakes originating in
the Nankai Trough. At our overseas workplaces, we are also preparing for risks including war,
civil war, riots, terrorism, anti-Japanese demonstrations, and strikes.

(Cooperation)(Audit)(Education,
training)

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

2. Internal and Statutory Auditing(Reporting)Group companies(Reporting)(Auditor)
Board of Auditors(Cooperation)

Executive Director(Instructions,supervision)(Audit)(Directors)
Board of Directors

36(5) Business Continuity Planning (BCP)(4) Basic Structure of Corporate Governance and Risk Management

Optional Committee

Financial/Data
SectionGovernance Control
Headquarters

Compliance Committee(Cooperation)

Third parties,
such as lawyers andaccountants

Each auditor attends an important meeting—such as that of the Board of Directors—in accordancewith the audit policy and division of operations (as established by the Board of Auditors).
The auditors also receive reports on the status of the execution of operations from the directors,
employees, etc., and are able to request an explanation as needed, view important documents,
and conduct site investigations to establish the status of the operations and assets at major
business offices. Thus, auditors conduct audit operations and hold meetings with the Board ofAuditors periodically — or as needed — for the mutual exchange of opinions and discussions.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

37

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Status of Cor p o ra te Gover na nc e

3. Outside Directors and Outside Audit & Supervisory Board Members

4. Accounting Audits(1) Outside Directors and Outside Audit & Supervisory Board Members

Support Staff for Audits:
Name of Accounting Auditor: Hibiki Audit Corporation
Names of Certified Public Accountants conducting the Audit: Certified public accountants: 19
Other: 1
Hironori Okada, Takanori Nakasuka, and Haruhito Urabe

Our company has six external directors and two auditors. They are designated independent
officers and were notified by the Tokyo Stock Exchange.
(2) Policy and Criteria for Independence from the Filing Company in the Election of Outside
Directors and Outside Audit & Supervisory Board Members
We have separately established criteria for judging the independence of external directors andexternal auditors via the Corporate Governance Guidelines, as based upon the standards set
forth in the Financial Instruments and Exchange Act. If the actors do not fall under any of thesecriteria, they are deemed independent of the company and are unlikely to have a conflict ofinterest with general shareholders.
(3) Approach to the Election of Outside Directors and Outside Audit & Supervisory
Board Members

Remuneration Paid to Directors and Audit & Supervisory Board Members
Millions of yen
Total amount of remuneration
Total amount of
remuneration
Internal Directors

External directors attend meetings of the Board of Directors (among others) and draw upon awide range of insights and management experiences to supervise the management of ourcompany from an external and independent standpoint. External auditors attend important
meetings, such as those with the Board of Directors, in accordance with the audit policy andthe division of operations established by the Board of Auditors. They also perform audit
operations by receiving reports through full-time auditors or directly from directors, employees,
etc., and by viewing important documents and materials. They exchange opinions and have
objective discussions from an independent standpoint on the Board of Auditors, held periodicallyor as needed. In conducting audits, they cooperate closely with the staff of the Audit
Office, full-time auditors, auditors of subsidiaries, and accounting auditors to ensure smooth
operational performance.

Bonus

Non-monetarycompensation,
etc.

¥506

¥241

264

—

26

Internal Audit & Supervisory
Board Members

9

9

—

—

1

Outside Directors,
Outside Audit & Supervisory
Board Members

43

43

—

—

8

The supervision, audit functions, and roles required in the current corporate governance system
are sufficiently guaranteed in close cooperation with internal directors, full-time auditors, staffof the Audit Office, personnel of the management department of the head office, and so on,
as necessary.
(4) Mutual Collaboration between Outside Audits and Internal, Statutory and Accounting
Audits, and the Relationship between Internal Control Divisions

Basic
remuneration

Number of
eligible
corporate
officers

Thousands of U.S. dollars
Total amount of remuneration
Total amount of
remuneration
Internal Directors

Basic
remuneration

Bonus

Non-monetarycompensation,etc

Number of
eligible
corporate
officers$3,789$1,805

1,977

—

26

Internal Audit & Supervisory
Board Members

67

67

—

—

1

Outside Directors,
Outside Audit & Supervisory
Board Members

322

322

—

—

8

Contents

NIPRO Annual Report 2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Status of Cor p o ra te Gover na nc e

38Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

5. Skill Matrix
Knowledge, experience, abilities, etc., possessed by the directors and auditors of the Company
Name

Position1

Yoshihiko Sano

Director

2

Kiyotaka Yoshioka

Director

3

Toshiaki Masuda

Director

4

Kyoetsu Kobayashi

Director

5

Kimihito Minoura

Director

6

Tsuyoshi Yamazaki

Director

7

Kazuhiko Sano

Director

8

Kenichi Nishida

Director

9

Yasushi Oyama

Director

10

Takehito Yogo

Director

11

Hideto Nakamura

Director

12

Toyoshi Yoshida

Director

13

Yoshiko Tanaka

Outside Director

14

Yoshiko Shimamori

Outside Director

15

Toshiaki Hattori

Outside Director

16

Katsunobu
HashimotoOutside Director

17

Hidehiko Kawazu

Outside Director

18

Kiyomi Aoyama

Outside Director

19

Takayuki Nomiya

Auditor20

Shigeru Yanagase

Outside Auditor (New)21

Yoshitaka Akikuni

Outside Auditor (New)

Corporate
Management

ESG(Sustainability)

Production/quality

R&D/Technology

Sales/marketing

GlobalDX/IT/Digital

Financial
Accounting

Legal, Ethical,
Crisis-Management* Although the three areas of knowledge, experience, and abilities of the directors and corporate auditors are listed, they do not represent all of the knowledge, experience, and abilities possessed by the directors and corporate auditors.
* indicates areas in which directors and corporate auditors have in-depth knowledge, experience, and abilities; whereas indicates areas in which directors and corporate auditors have the most in-depth knowledge, experience, and abilities.
The Company’s main business is the manufacture and sale of medical devices, pharmaceuticals, glass products, etc., and the Company aims to proactively expand its business in markets around the world. Therefore, the Company
needs a management team that is both appropriately sized to accommodate its expanding business scale and diverse in terms of gender, internationality, work experience, age, and other factors. The Company recognizes that thesustainable growth of the Company and the enhancement of its corporate value can be achieved when these management members are in charge of business execution (directors) and have the roles and responsibilities to promote
the businesses under their control. Therefore, the Board of Directors determines whether a person is qualified to serve as a director or auditor of the Company based on her or his knowledge, experience, and abilities in management,
financial accounting, legal affairs, research and development, and human resources development. In addition, independent outside directors shall include those who have corporate management experience at other companies andare capable of providing accurate proposals and advice to management from a broad perspective.
* The skills, careers, and expertise required for the directors and auditors will be reviewed in response to changes in the business environment and management policies.

Contents

NIPRO Annual Report 2023

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Outs ide Dire c to rs ’ M e ssa g e s
Expecting further
demonstration ofcapabilities of external
directors
Yoshiko Tanaka
Outside Director

Based on the listing criteria for the Prime Market, Nipro
significantly reduced the number of internal directors
and added four external directors in 2022, which brought
the proportion of outside directors to 1/3 of the entire
board of directors. Since then, one year has passed. It has
become easier to have discussions owing to the fewer
number of members on the board of directors. However,I feel that the introduction of external viewpoints, whichshould have been done by the external directors, is stillinsufficient. Nipro should clarify the roles of outside
directors and further strengthen its members, which I expect
will promote a positive discussion. Moreover, it is necessary
to strengthen cooperation with the board of corporate
auditors to understand more specific problems.
Regarding the progress of the Medium-Term Management
Plan, sales are steadily increasing, but profitability shouldbe improved. To this end, it is important to not only sell
general-purpose products but also accelerate the speed ofdevelopment of high-value-added and high-profit products,
such as catheters and increase the profit ratio. Additionally,
the overseas sales network is expected to be expanded
through more active cooperation between Domestic Division
and Global Business Division.
To achieve these goals, women’s participation isessential. I hope Nipro will invest effort in preparing female
executive candidates who will lead the next generation of
the Nipro Group—by creating a comfortable work environmentand raising awareness through education.

Contributing to productdevelopment based on
medical needs andfurther promotion ofsustainability strategies
Yoshiko Shimamori
Outside Director

As life seems to have returned to normal after the COVID19 pandemic, Nipro’s board of directors are actively andconcretely discussing management issues—such as
passing on the increased costs of raw materials to selling
prices and improving distribution costs by abolishing loose
shipment and shipment to branch offices. Even underdifficult circumstances, we are expected to grasp theneeds pertaining to medical practices and continuously
develop products and systems that contribute to securing
the safety of patients and provide effective medical care—including non-dead syringes, heart lines, or automatic
infusion pumps.
As a member of the Research Ethics Review Committee,
I participate in the examination of the ethical aspects ofresearch that guarantee the voluntary participation ofsubjects in Nipro’s research activities. Moreover, I further
enhanced interactions at the medical societies to which I
belong, such as by introducing Nipro products therein andexchanging opinions.
Multiple committees have been established for environment, society, and governance, and specific sustainability
numerical targets are being formulated and examinedcompany-wide. Particularly in terms of the environment,
our climate change report was evaluated by the CDP inthis term. Although the evaluation ratings were moderate,
improvement targets were clarified, which I believe indicates significant progress. In the future, I will contributeto the construction of sustainability strategies that willlead to higher ESG evaluation ratings.

39Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Contributing to vitalizing
discussion considering
the entire management
and improving financial
structure
Toshiaki Hattori
Outside Director

As the board of directors of Nipro, we have highly active
discussions on each agenda, such as rigorous validationof strategic investments and investment returns. However,I particularly want enthusiastic company-wide discussions
from the “One Nipro” perspective, across various
departments. I believe that in the future, a deeper
discussion on the direction of general management will be
more important than individual business reports fromeach director.
I have an impression that each department is working
hard to achieve the goal of 1 trillion yen in sales in the fiscal
year ending in March 2031. Certainly, sales are the source ofprofits. However, it is also important to improve the earnings
ratio per head and to activate the organizational structure
based on young employees’ enthusiastic participation in
activities. Regarding the mid-term management plan, I thinkthat improving the B/S—rather than the P/L—index is more
important. This is because the appropriate allocation ofassets, ratio of equity, ratio of healthy net interest-bearing
debt, etc., are outcomes of long-term management efforts.
Furthermore, for a company to achieve long-term growth,enhancing its compliance systems, including those overseas,
is extremely important, which will eventually benefit us.
In the future, I will work hard to achieve these goals byselecting and concentrating the businesses and assets.

Contents

NIPRO Annual Report 2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

O utsi d e D irec to rs ’ Messa g es
Contributing to thedevelopment of
the Nipro Group using
school management
experience

Contributing to thecreation of anorganization that
optimally utilizes“people”

40Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Expecting developmentof products that capture
the needs prevalent inhealthcare settings

Katsunobu Hashimoto

Hidehiko Kawazu

Kiyomi Aoyama

Outside Director

Outside Director

Outside Director

Currently, DX in the medical device industry is rapidly
progressing, and in fact, competitors and other similar
companies have presented various strategies associatedwith DX. Under such circumstances, I find great potential in
the collaboration between businesses (companies) andeducation (schools) from the perspective of healthcare
school management, as presented below.
1	Industry-government-academia
collaboration
	We will provide students with a place of practical learning in addition
to nurturing university startups and promoting cutting-edge
research and development using AI. Furthermore, we will contributeto benefitting the entire society by cooperating with variousorganizations, including local governments and NPOs.
2 Bridge between companies and local governments		We will solve issues arising in companies and local governments,
such as pollution problems, by using university knowledge, andcontribute to the circular economy.
3 Development of human resources utilizing knowledge derived from	
both humanities and sciences and a global perspective	
We will develop human resources that contribute to building asustainable society according to the global standards—beyond theboundaries of the humanities and sciences.
4 Development of human resources contributing to the Sustainable	
Development Goals (SDGs)
	In universities, we will promote the development of human resourcesthat contribute to the SDGs.
5 Promotion of international exchange		We will promote international exchanges with Asian countries
including China and incorporate knowledge from different areas.

I think the development of the Nipro Group will be further
accelerated by achieving these themes consecutively.

At Nipro’s board of directors, reasonable reports are madebased on the detailed materials provided for each business,and the directors engage in an active discussion. The internal
directors in charge of different business areas provide
positive opinions, and I find the decision-making process
suitable. I think that such effective communication amonginternal directors is Nipro’s strength. However, the strengthof internal ties can also be a weakness at times. I think thatmy role as an external director is providing an outside perspective to such discussions. Therefore, I will further deepen
my understanding of the Nipro Group’s business and provide
appropriate opinions.
The strength of the Nipro Group is its business related
to healthcare, which is necessary for everyone worldwide,
and its growth is supported by motivated human resourcesthat consider the user’s viewpoint. Nipro has set a goal thatthe turnover rate within 10 years of joining the company
would be less than 20%. As 30% of new graduates are
generally said to leave their job in 3 years, I find it great tohave such an extremely ambitious goal. To achieve thisgoal, an open corporate culture and smooth communication
among employees are important. I will contribute toachieving this goal by optimally utilizing my experience inhuman resource development, which I have cultivatedthrough welfare administration.

Nipro’s board meetings always involve some degree oftension, despite which, each director enthusiasticallyengages in open-minded discussions. Occasionally, radical
opinions regarding the agenda are shared with persons incharge, but this is not done with the intention of blaming
them for failure. We have a constructive discussion on thenext challenge. The external directors are provided sufficient
time to examine the agenda owing to detailed materials
distributed in advance, and we are provided with lectures on
the responsibilities of the director by external lecturers.
The Nipro Group is capable of handling a broad rangeof products that capture the needs of healthcare settings.
In addition to renal products with excellent safety andfunctionality, CL Fine has been increasingly used as aninfection measure product. As the number of patients withcerebrovascular/cardiac diseases is expected to increase,vascular-related products will become a new growth areain the future. Additionally, the development of surgicalproducts is an important research theme because
orthopedic diseases increase with aging.
The Nipro Group’s sustainability is ensured by its provisionof a stable supply of these aforementioned outstanding
products. I want the Group to achieve the social mission of
supporting people’s health by implementing BCP measures,such as the decentralization of plants.

Contents

NIPRO Annual Report 2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Audit & S up e rvis or y B o a rd M e m b e rs’ M e ssa ge s
My role as an auditor is toprevent serious scandals

Contribution to the improvementof the Nipro Group’s corporate
value using experiences in
the fields of technology
and development

41

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Contribution to
the establishment of
a compliance system led
by head office

Takayuki Nomiya

Shigeru Yanagase

Yoshitaka Akikuni

Audit & Supervisory
Board Member (Full-time)

Audit & Supervisory
Board Member (Outside)

Audit & Supervisory
Board Member (Outside)

Nowadays, news of fraud and scandals by well-known
companies is attracting attention from the media. I thinkthat one of the most important roles of an auditor is to preempt serious scandals in a company by establishing asystem for their prevention. It is important for an auditor toattend meetings with the Board of Directors and examine
important documents. However, these tasks alone do not
help us comprehend the actual situation of the company.
What is important is that we visit the field and gauge theactual state of affairs. For this purpose, I always visit businessoffices across the country a dozen times a year to directly
grasp the factual situation on ground.
What I have learnt through my experience as a corporate auditor so far is that the management policy has notbeen sufficiently disseminated in the company. The rapid
growth and expansion of the Group in recent years are
partially responsible for this. It is most important for all
employees to understand and share the direction of theGroup as a company listed on the prime market. We needto continue to enhance the awareness levels of employees,
improve the level of the entire Group, and strengthen
human resources in the future.
Regarding overseas offices, the Overseas Audit Officeconducts on-site audits, by scrutinizing the reports fromlocal audit corporations. I think our challenge is to consider
how to create opportunities for auditors to directly visit
overseas and understand the actual situation on the field.

I gained experience in the technology and development
departments of a major material manufacturer. Because I
was in charge of developing new products (which werelater successful) from planning proposal to launch, I could
gain various experiences from upstream to downstreamthat were not limited to research and development. At the
beginning of development, active disclosure of informationsuch as in-house presentations, lecture meetings withexternal parties, and prototype exhibitions, as well as patentapplications, was essential. Meanwhile, various skills andexecution capabilities were required during production,such as (1) selection of facilities, (2) formulation of various
standards and manuals (raw-material specifications, manufacturing procedures, quality control, etc.), (3) education/
training for operators, (4) waste treatment, etc. I believethat I can leverage these experiences as an external auditor
for Nipro.
The Nipro Group has set a sales goal of one trillion yen
for the fiscal year ending March 2031. To achieve the goal,
new products must be developed. I have had the experience of approaching an unexplored field in the company.
I will utilize these experiences to contribute to the improvement of the Nipro Group’s corporate value through both
attack and defense, thus promoting not only the development of new businesses but also cost reduction and thequality of the Group’s existing products. I will also be
involved in verifying the validity of development processes
and securing intellectual property.

I built my career at a major bank and have experience asa resident officer in bond-underwriting operations in
the capital-market divisions of overseas branches/local
subsidiaries, as well as as a chief officer in the corporatepension management division. I have also served as anauditor for several companies since 2011, and I believe thatthese experiences will be a great advantage in reflecting
shareholders’ and investors’ voices in the managementof Nipro.
Because auditors are not directly involved in the execution of business operations, I consider my role as one toimprove the final corporate value through the reinforcement of compliance and governance. Especially because
the Nipro Group has many overseas subsidiaries, I believethat upgrading and expanding the global audit and compliance systems are issues that should be addressed in the
future. I will contribute to the establishment of a systemthat enables us to understand overseas subsidiaries’ actual
situations more effectively through a three-party audit
comprising the internal audit department, auditors, andauditing corporations.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

42

Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

Board o f Dire c to rs a nd Aud i t & S up e r v i sor y Boa rd M e m be rs
As of July 3, 2023

Outside Directors
Yoshiko Tanaka

May. 1983 : General Manager, Drug Department,
Tokushukai Medical Corporation,
Osaka Headquarters
Jun. 1997 : General Manager, Planning andManagement Department, andGeneral Manager, Drug Department,
Tokushukai Medical Corporation,
Osaka Headquarters
Apr. 2002 : Part-time Lecturer of Kobe
Pharmaceutical University
Jun. 2002 : President and Representative
Director, MEDY HOPE Corporation (topresent)
Jun. 2014 : Appointed Director, Nipro Corporation(to present)
Jul. 2014 : Council member of Kobe
Pharmaceutical University

Yoshiko Shimamori

Apr. 1990 : Manager of Nursing Division of
Preparatory Office for Toho University
Sakura Medical Center
Aug. 1990 : Manager of Nursing Division of Tokyo
Saiseikai Mukojima Hospital
Jun. 1999 : Executive Officer of JapaneseNursing Association
Apr. 2002 : Manager of Nursing Division andAssistant to Director of Kyoto
University Hospital
Apr. 2007 : Professor of Keio University Faculty of
Nursing And Medical Care
Jun. 2010 : President of Tokyo Nursing
Association
Jul. 2016 : Professor of Institute for Biomedical
Sciences of Iwate Medical University
Apr. 2017 : Professor and Dean of School of
Nursing of Iwate Medical University
Apr. 2021 : Professor Emeritus and Council
member of Iwate Medical University
Jun. 2021 : Appointed Director, Nipro Corporation(to present)

Audit & Supervisory Board
Member (Full-time)
Toshiaki Hattori

Jan. 2000 : Branch Manager of Kori Branch,Daiwa Bank Ltd. (currently Resona
Bank, Ltd.)Mar. 2002 : General Manager of Taisho Branch,Resona Bank Ltd.
Jun. 2004 : General Manager of General Affairs
Department, Administration Division,
Toami Corporation General
Jun. 2006 : Director and General Manager ofGeneral Affairs Department,
Administration Division of the same
company
Jun. 2008 : Managing Director, General Manager
of Administration Division and General
Manager of General Affairs
Department of the same company
Jun. 2012 : Managing Director, General Manager
of Administration Division and General
Manager of General Affairs
Department and General Manager of
Accounting Department of the same
company
Jun. 2022 : Appointed Director, Nipro Corporation(to present)

Katsunobu Hashimoto

Hidehiko Kawazu

Jun. 1987 : Manager of Division of Welfare for
the Mentally Retarded, Tokyo
Metropolitan Government Bureau ofSocial Welfare and Public Health(Manager of Head Office)Jul. 1989 : Manager of Division of Children,
Tokyo Metropolitan Government
Bureau of Social Welfare and Public
Health (General Manager)
Jul. 1991 : Deputy Branch Chief of Northern
Branch No. 2 Of Tokyo Metropolitan
Government Bureau of Waterworks(General Manager)
Aug. 1994 : Councilor of General Affairs
Department, Tokyo Metropolitan
Government Bureau of Social Welfare
and Public Health (General Manager
of Head Office)Jun. 1995 : General Manager of Division ofChildren and Family, Tokyo
Metropolitan Government Bureau ofSocial Welfare and Public HealthJul. 1997 : General Manager of Division ofCommunity Welfare Promotion, Tokyo
Metropolitan Government Bureau ofSocial Welfare and Public Health
Apr. 1999 : General Manager of Division of Living
Environment, Tokyo Metropolitan
Government Bureau of HealthJan. 1981 : Secretary-general of Osaka Collegeof Medical Technology(to present)

Apr. 2001 : General Manager of Division of Foodand Drug Safety, Tokyo Metropolitan
Government Bureau of HealthMay. 1991 : Executive Director of Educational
Corporation Osaka Jikei College

Apr. 2002 : Professor, Faculty of Education,
Tamagawa University (Head of
Department of Infant Development)

Apr. 2011 : Secretary-general of Jikei Graduate
University of Health Care Sciences(currently Jikei University of HealthCare Sciences) (to present)
Apr. 2015 : President of Izumo Medical Nursing
College (to present)
Apr. 2018 : President of Osaka Medical WelfareCollege (to present)
Apr. 2020 : President of Osaka Medical Nursing
College (to present)
Apr. 2022 : President of Osaka High Technology
College (to present)
President of Osaka Health andWelfare College (to present)
Jun. 2022 : Appointed Director,
Nipro Corporation (to present)

Apr. 2008 : Dean, Faculty of Education,
Tamagawa University
Jun. 2018 : Chief Director, Social Corporation
Yuai Gakuen (to present)
Jun. 2022 : Appointed Director, Nipro Corporation(to present)

Kiyomi Aoyama

Apr. 1990 : Manager of Division of Maternal andChild Health, Tokyo Metropolitan
Government Bureau of Social Welfare
and Public Health
Apr. 1992 : Councilor of Public Health Center of
Nihonbashi, Chuo Ward (Prevention
Section Manager Work Handler)
Apr. 1998 : Director of Shinagawa Ward Public
Health Center
Apr. 2002 : Director and General Manager of
Nakano Ward Public Health Center
Apr. 2007 : Director of Minato Ward Public HealthCenterMay. 2010 : Full-time contract doctor,
Occupational Health Association(currently Japan Medical Checkup
Foundation)
Jun. 2022 : Appointed Director, Nipro Corporation(to present)

Takayuki Nomiya

Oct. 1976 : Joined Nipro Corporation
Apr. 1997 : General Manager of General Affairs
Department, Nipro Corporation
Feb. 2003 : General Manager of Audit Office,Nipro Corporation
Jun. 2008 : Corporate Auditor, Nipro Corporation(to present)

Audit & Supervisory
Board Members (Outside)
Shigeru Yanagase

Apr. 2003 : General Manager of Development
Department, Special Equipment
Materials Division, Nippon Sheet
Glass Co., Ltd.
Jun. 2023 : Appointed Audit & Supervisory Board
Member, Nipro Corporation (topresent)

Yoshitaka Akikuni

Jul. 2001 : General Manager, Pension Trust
Investment Department, Trust AssetManagement Department,
The Daiwa Bank, Ltd. (currently
Resona Bank, Ltd.)
Jun. 2006 : Executive Officer, General Manager ofTrust Asset Management Department,
Resona Trust and Banking Co., Ltd.
(currently Resona Bank, Ltd.)
Apr. 2008 : Executive Officer in charge of GeneralFunds Department, Resona Bank, Ltd.
Jun. 2009 : Director and Managing Executive
Officer, J and S Insurance Service
Co., Ltd.
Apr. 2011 : Auditor, Osaka Electro-Communication
University
Jun. 2011 : Outside Corporate Auditor, Japan
Trustee Services Bank (Currently
Custody Bank of Japan, Ltd.)
Jun. 2014 : Outside Corporate Auditor, Kokusai
Aero Marine Co., Ltd.
Jun. 2015 : Outside Corporate Auditor, Ishihara
Sangyo Co., Ltd.
Jun. 2023 : Appointed Audit & Supervisory
Board Member, Nipro Corporation(to present)

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionSustainability of Nipro
Environment
Human Resources Strategy
Research and Development
Activities

Management Foundation

Board of D irec to rs a nd Aud i t & S up e r vi s or y B o a rd M e m b e rs

43Intellectual Property Investment
Status of Corporate GovernanceOutside Directors’ Messages
Audit & Supervisory Board Members’ Messages
Board of Directors and Audit & Supervisory
Board Members

As of July 3, 2023

President &Representative Director

Senior Managing Directors

Yoshihiko Sano

Kiyotaka Yoshioka

Tsuyoshi Yamazaki

Takehito Yogo

General Manager of Domestic Business Division,
Chief of Business Strategy Office

General Manager of International Business, Senior
Managing Director of Pharma Packaging Division

General Manager of Corporate Planning Division(Chief Financial Officer)

Toshiaki Masuda

Kyoetsu Kobayashi

Kimihito Minoura

Kazuhiko Sano

General Manager of Medical Technology
Headquarters for Planning,
Development & Marketing,
Chief of Research & Development Center

General Manager of Sustainable Production &Risk Management Division

General Manager of Regenerative Medicine
Business Division,
New Business Development Division

Head of Construction & Engineering
Headquarters,
Chief of Production Technology Center

Kenichi Nishida

Yasushi Oyama

Hideto Nakamura

Toyoshi Yoshida

General Manager of Pharmaceutical Business
Division, Pharmaceutical Production Management
Division, Research Planning Department,
Pharmaceutical Research Laboratories

General Manager of Vascular Business Division,
Vascular Product Development & Sales Division

General Manager of General Affairs & Human
Resources Division,
Governance Supervise Division

General Manager of Quality Assurance &Regulatory Compliance Division

Managing Directors

Directors

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section44

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated Statementsof IncomeFinancial/Data Section

Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Corporate Information

Fi n an cial Review
Overview

Selling, General and Administrative Expense

In the current fiscal year, demand for some department-related products,
which had been restrained by postponement of surgeries and other factors,
recovered as the economy recovered due to increased movement towardnormalization of economic activities, despite the continuing impact of the
spread of new coronavirus infection. In Japan, sales volume of our ownbrand antibiotics and infusion products increased, in addition to the increasein NHI prices of unprofitable re-categorized products. Overseas, sales of
dialyzers and dialysis-related products, our mainstay products, remained
steady. As a result, consolidated net sales increased.
On the other hand, operating income decreased due to the soaring
prices of materials and energy caused by the rise in crude oil prices,transportation costs, and an increase in selling, general and administrative
expenses such as research and development costs.

Selling, general and administrative expenses increased by 16.2% comparedwith the previous fiscal year to ¥145,720 million (US$1,091.3 million).
This is mainly due to increase of transportation costs and research anddevelopment expenses.

Consolidated Business Results
Relevant quantitative data for the period under review has been converted
at the rate of US$1.00 = ¥133.53 (the rate of exchange as of March 31, 2023).
Net Sales
Sales for the current term were ¥545,199 million (US$4,083.0 million).
Sales increased 10.2% YoY.
Cost of Sales
Cost of sales increased 10.5% from the previous period to ¥381,749 million.
This increase was mainly due to higher sales and material costs.
The gross profit margin decreased 0.2 percentage points from theprevious period to 30.0%. As a result, gross profit increased 9.5% fromthe previous period to ¥163,449 million.

(Years ended March 31)

Net sales

(Millions of yen)

426,399 442,516 455,559

494,789545,199

Operating Income
As a result of the aforementioned factors, operating income was down by
25.8% compared with the previous fiscal year to ¥17,729 million (US$132.8
million). The ratio of operating income to net sales decreased by 1.5
percentage points to 3.3%.
Ordinary income
Ordinary income was ¥15,346 million (US$114.9 million), which is ¥12,237
million lower compared with ordinary income in the previous fiscal year.
The main factors were an increase in equity in losses of affiliates and alarge swing toward losses in non-operating income and expenses due to
one-time non-operating expenses recorded as a result of the applicationof hyperinflation accounting in the Turkish subsidiary.

2019

2020

2021

Operating income

23,827

26,420 27,627

2022

2023

(Millions of yen)

23,882
17,729

2019

2020

2021

2022

2023

Income before income taxes
As a result of the factors outlined above, income before income taxes is¥16,777 million (US$125.6 million), compared to ¥23,243 million in theprevious fiscal year.

Income before income taxes		
(Millions of yen)23,243

21,233

17,51916,777

Income Taxes
Income tax including deferred taxes increased by 32.6% compared withthe previous fiscal year to ¥10,843 million (US$81.2 million)
Net Income (Loss) Attributable to Non-controlling Interests
Net income attributable to non-controlling interests amounted to ¥1,359
million (US$10.2 million).

-10,158

2019

2020

2021

2022

2023

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section45

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated Statementsof IncomeFinancial/Data Section

Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Corporate Information

F ina ncial Rev iew
Net Income Attributable to owners of the Parent
Net income attributable to owners of the parent was ¥4,574 million (US$34.3
million), compared to net income attributable to owners of parent of¥13,455 million in the previous fiscal year. Basic earnings per sharedecreased to ¥28.05 (US$0.2) from ¥82.50 in the previous fiscal year.
Return on equity decreased to 2.3% from 7.8% for the previous fiscal year.
Net Sales by Geographic Segment
Japan
In Japan, net sales increased by 3.6% compared with the previous fiscal
year to ¥290,177 million (US$2,173.1 million) mainly thanks to the increaseof sales in the Medical-Related business.
Americas
In Americas, net sales increased by 25.4% compared with the previous
fiscal year to ¥98,089 million (US$734.6 million) mainly thanks to theincrease of sales in the Medical-Related business.
EuropeIn Europe, net sales increased by 13.1% compared with the previous fiscal
year to ¥68,294 million (US$511.5 million).
Asia
In Asia, sales increased 16.5% year on year to ¥88,636 million (US$663.8
million) due to increased sales in the medical-related business.
Financial Position
Total assets increased ¥97,078 million YoY to ¥1,027,399 million (US$7,694.1
million). Current assets increased ¥51,830 million and noncurrent assets
increased ¥45,247 million. The increase in current assets was mainly due
to a ¥19,986 million increase in trade notes and accounts receivable, andthe increase in fixed assets was mainly due to a ¥33,054 million increasein construction in progress.

Total liabilities decreased ¥54,771 million YoY to ¥785,225 million(US$5,880.5 million). Current liabilities decreased ¥9,083 million andnoncurrent liabilities increased ¥63,855 million. The main reason for thedecrease in current liabilities was a decrease of ¥20,105 million in short-termloans payable, and the reason for the increase in long-term liabilities was
mainly due to a ¥48,941 million increase in long-term loans payable.
Total net assets increased ¥42,306 million YoY to ¥242,173 million(US$1,813.6 million). Shareholders’ equity increased by ¥853 million andaccumulated other comprehensive income decreased by ¥20,224 million.
As a result, the equity ratio increased by 0.2 percentage point to 20.1%
compared with the end of the previous fiscal year.
Cash Flow
Net cash provided by operating activities amounted to ¥10,395 million(US$77.8 million). The major cash inflows were depreciation andamortization and income before income taxes. The main accounts of cash
outflow were an increase in inventories.
Net cash used in investing activities came to ¥71,737 million (US$537.2
million). The principal cash outflow was for the purchase of fixed assets.
Net cash obtained by financing activities amounted to ¥43,077 million(US$322.6 million). The main account of cash inflow was repayment oflong-term loans, while the main account of expenditures was repaymentof long-term loans payable. As a result, cash and cash equivalents stoodat ¥84,695 million (US$634.3 million) as of March 31, 2023

(Years ended March 31)

Net income attributable to owners(Millions of yen)of the parent

14,209 13,455

12,136

4,574-12,281

2019

2020

2021

Capital investment

2022

2023

(Millions of yen)

95,991
56,276 57,866

2019

2020

70,580 73,675

2021

Total assets

2020

2023

(Millions of yen)

845,821 831,865 854,396

2019

2022

2021

930,3212022

1,027,399

2023

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section46

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated Statementsof IncomeFinancial/Data Section

Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Corporate Information

F ina ncial Rev iew
Staff
The total number of employees as of the end of the period under review
was 38,770. Employees in Japan were 9,674 and the number of overseas
employees was 29,096.
Basic Policy on Distribution of Profit
At Nipro, we regard the return of profits as one of the most importantmanagement policies and pay dividends to our shareholders. We are striving
to strengthen our foundations in development, production, and sales froma long-term perspective, to improve profitability and stabilize production,and to establish a rational profit distribution system.

Risk Factors(Years ended March 31)

The following are risks that may have an effect on the Nipro Group’s
operational results and/or financial condition. The items concerned were
determined as of March 31, 2023.

Net assets

(1) Risks Related to Product Safety
The Nipro Group brings all of its capabilities to bear in ensuring productsafety in the design, development and manufacturing of medical devices andpharmaceutical products. There are still the risks, however, that accidental
defects or adverse effects could result in damages to a third party andour being sued for liability. To cover these risks, we therefore maintain generalliability and product liability insurance. In the unlikely event of a successful
claim in excess of the insurance coverage, however, there could be amaterial adverse effect on our operational results and/or financial condition.
(2) Risks Related to Supplier Concentration
The Nipro Group procures materials and parts for its operations froma large number of suppliers. Some key materials or parts may be obtained
only from a single supplier or a limited group of suppliers. If circumstancesat any of these suppliers make it impossible for us to acquire a sufficientquantity of materials or parts to meet our production needs in a timely andcost-effective manner, there could be a material adverse effect on ouroperational results and/or financial condition.

(Millions of yen)

242,173
171,830 161,237 174,053

2019

2020

2021

199,867

2022

Basic earnings per share
87.1

73.6

2023

(Yen)

82.5
28.0

-75.3

2019

2020

2021

2022

Number of employees

29.3

2019

32.8

2020

2023

(Thousand)

35.3

36.3

2021

2022

38.8

2023

NIPRO Annual Report 2023

Contents

About NIPROManagement
MessageFinancial/Data Section

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section47

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated Statementsof IncomeConsolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Corporate Information

F ina ncial Rev iew(3) Risks Related to Changes in Government Healthcare Policies
The business sector to which the Nipro Group belongs is intimately
connected with the healthcare system and is subject to the regulations laidout by government organizations, including the National Health Insurance
System and the Pharmaceutical and Medical Devices Act formerly known
as Pharmaceutical Affairs Law. Should circumstances arise in which
we were unable to respond to changes in the environment brought about
by unforeseeable wholesale changes in government healthcare policies,
there could be a material adverse effect on our operational results and/or
financial condition.
(4) Risks Related to Changes in Sale Prices
The products sold by the Nipro Group include some that are affected on
an irregular two-year basis by price reductions under the Japanese payment
system for medical care, drug prices and reimbursement prices for medical
materials and supplies. Moreover, should measures to hold down medical
costs also become pervasive worldwide, resulting in intensified competition
between corporations and leading to prices falling to a greater degree than
anticipated, there could be a material adverse effect on our operational
results and/or financial condition.
(5) Risks Related to Changes in Prices of Raw Materials
The products manufactured by the Nipro Group include some that are
made from petrochemical products such as plastics. Should the cost of raw
materials such as petrochemicals rise, there could be a material adverse
effect on our operational results and/or financial condition.

(6) Risks Related to Overseas Expansion
The Nipro Group has manufacturing bases and sales offices aroundthe world for the production and supply of its products. Should there be
unexpected revisions to legal regulations or political or economic changes
in these countries or regions, there could be a material adverse effect on
our operational results and/or financial condition.
(7) Risks Related to Intellectual Property
The Nipro Group owns numerous patents and trademarks, and maintains
various proprietary rights for the products it manufactures. Additionally,
we take all possible measures to avoid infringing the patents and proprietary
rights of any third party, and to avoid breaching any license agreements
we have concluded concerning technologies. Nevertheless, if an unanticipated claim for damages were to be made by a third party and the defenseof the Nipro Group were to be rejected, there could be a material adverse
effect on its operational results and/or financial condition.
(8) Risks Related to Environmental Regulations
The Nipro Group believes it has taken adequate precautions to comply
with applicable regulations in the course of its business activities. Should
our activities cause an unforeseen environmental problem, however, witha claim for damages made against us, there could be a material adverse
effect on our operational results and/or financial condition.

(Years ended March 31)

Equity ratio

(%)

19.1

17.9

18.8

19.9

20.1

2019

2020

2021

2022

2023

Return on assets

(%)

1.7

1.5

2021

2022

1.5
-1.5

2019

2020

0.5

2023

Return on equity

(%)

9.2

7.3

7.8
2.3

-7.9

2019

2020

2021

2022

2023

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Financial/Data Section

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionFinancial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated Statementsof Income48
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Corporate Information

F ina ncial Rev iew(9) Risks Related to Exchange Rate Fluctuations
The Nipro Group, including its overseas subsidiaries, carries out its foreign currency transactions
primarily in US dollars and euros, but calculates financial statements for its overseas subsidiaries
using Japanese yen for the purpose of producing consolidated financial statements. Fluctuations
in exchange rates may therefore have a material adverse effect on our operational results and/or financial condition.

(13) Risks Related to M&A and Business Alliances
The Nipro Group conducts M&A activities and enters into business alliances to reinforce
its business base. Prior to concluding these deals, we carry out a thorough investigation of
the target company. However, should any problems arise such as the discovery of unrecognizedliabilities or should the development of the acquired business not proceed as planned, there could
be a material adverse effect on our operational results and/or financial condition.

(10) Risks Related to Investment Value
The Nipro Group’s assets include investments in stocks and other securities. These investments
have been made for purposes such as building good business relationships with the issuersof such securities, or for gathering useful information for the development of new products or
new business opportunities. Should the value of these investments decline significantly owing
to fluctuations in the stock market, circumstances at an issuer, or a change in the accounting
methods used to deal with these investments, there could be a material adverse effect on ouroperational results and/or financial condition.

(14) Other Risks
Fires, earthquakes, acts of terrorism, wars, epidemics, or other unforeseen man-made or natural
disasters affecting areas or facilities where the Nipro Group conducts its business activities
may cause a delay or interruption in production, sales, distribution, or provision of services.
Should such a delay or interruption be extended, there could be a material adverse affect on
our operational results and/or financial condition.

(11) Risks Related to Controls on Personal Information
The Nipro Group has established strict precautions to protect the confidentiality of personal
information in our possession. However, if due to unforeseen events or an accident thispersonal information is leaked outside the Group, causing a loss of trust or customers, there
could be a material adverse effect on our operational results and/or financial condition.
(12) Risks Related to Fund Raising
The Nipro Group relies on debt finance in the form of loans from financial institutions or
issuance of corporate bonds and commercial paper, etc., to raise business and investment
funds. If due to turmoil in financial markets, there is a reduction in lending from financial
institutions or a significant downgrade of our credit rating by credit rating agencies, we may
not be able to raise the necessary funds when we need them on acceptable terms. At thesame time, we may incur restrictions on our fund-raising capabilities or see an increase in thecost of fund-raising. Any of these occurrences could have a material adverse effect on ouroperational results and/or financial condition.

(15) Risk Related to Coronavirus spread
An abnormal situation such as the spread of a new coronavirus infection or a natural disasteroccur on a scale of beyond our expectations. However, if the production base is closed, logistics
is stagnant, or the business operations towards major customers become difficult, it will affectour financial condition and business results. We provide hygiene management, telecommuting(remote work),staggered working hours and web meetings for measures to prevent the spreadof new coronavirus infection.

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Social Bond
ReportingManagement
Foundation

Financial/Data
Section49

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Te n -Year S ummar y

Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31

Income Statement Data:
Net sales

Medical-Related (*1)¥

Pharmaceutical-Related (*1)

PharmaPackaging (*1)

Millions of yen

2023

2022

2021

2020

2019

2018

2017

545,199 ¥494,789 ¥455,559 ¥442,516 ¥426,399 ¥395,397 ¥359,699 ¥

72,734

74,386

72,38870,35763,482

66,846

69,140419,957

373,481343,824

325,084 ¥

300,753$4,082,970

51,508544,708

272,167

237,777

221,363

28,33132,18429,83027,611

62,26657,372

381,749

345,519

316,718

308,304

295,767

268,272

244,602250,773

225,525

213,220

Operating income

17,72923,882

27,627

26,42023,82727,08828,77024,204

16,571

12,289Selling, general and administrative expenses

145,720

Medical-Related (*2)

38,599Pharmaceutical-Related (*2)

5,615PharmaPackaging (*2)

2,739Other (*2)

257

125,386

39,241

9,826
2,889
101

691

111,21238,87910,608

1,992
376

174

107,791

36,24913,196

675

176

31

106,804

36,722

10,662778

146

28,404

366,650 ¥262,198

Cost of sales

559

35,526300,117

2023

2014

46,361

752

36,217327,359

2015

51,754

Other (*1)

38,655

335,767

2016

Thousands of
U.S. dollars (Note 1)

29

100,036

36,522

13,104(1,308)75

29

86,32630,63814,135(1,313)(10)

32

91,671

28,204

12,060(1,618)61

104

82,987271

75,242

3,145,045
387,583

5,631

2,858,904

132,776—

20,436

289,066(2,889)(2,183)

20,513

23,813

10,553

131

8,013

216

42,057
1,929

Profit before income taxes

16,777

23,243

17,519(10,158)

21,23317,02618,324

26,284

19,90812,891

72,530

Increase in tangible and intangible fixed assets

102,633

96,79378,86164,67064,394

61,99058,31057,10147,69835,093

768,620

R&D expenses

19,669

8,645

7,891

147,303

Net income attributable to owners of the parent

4,574

Depreciation and amortization

Balance Sheet Data:
Total assets

Property, plant and equipment—net
Working capital

Current liabilities

Long-term liabilities
Capital stock

Capital surplus
Net assets

46,275¥

1,027,399 ¥
432,550

186,379

302,910482,315

84,397—242,173

13,45543,313

18,734

14,20939,84918,652(12,281)
38,682

18,204

12,13635,252

16,526

11,82932,565

16,113

11,346

31,128

11,517

19,71830,147

10,26912,47027,667

2,861

25,151

28

346,557

930,321 ¥854,396 ¥831,865 ¥

845,821 ¥826,477 ¥

752,839 ¥

708,882 ¥695,306 ¥619,654$7,694,147

125,466

149,866

143,626

168,675

184,861

134,983

115,970

71,94545,405

1,395,788

377,752

311,993

418,460

84,397—

199,867

335,906

271,501

408,841

84,397

4

174,053

307,551

289,404

381,223

84,397
5

161,237

284,483

274,277

399,71284,397—

171,830

270,273

251,186

392,087

84,397—

183,485

244,222251,792

324,639

84,397—

176,408

223,756

220,195

191,593

252,147

278,402250,714

84,39784,39784,397281,227—

175,507

238,095

635

178,810

232,979688

135,960

3,239,350

2,268,479

3,612,038

632,051—

1,813,629(*1) Effective the fiscal year ended March 31, 2011, the Company has adopted ASBJ Statement No. 17 ”Accounting Standard for Disclosures about Segment of an Enterprise and Related Information” (March 27, 2009) and ASBJ Guidance
No. 20 ”Guidance on Accounting Standard for Disclosures about Segment of an Enterprise and Related Information” (March 21, 2008). Net sales and operating income for the period for the fiscal year ended March 31, 2010 havebeen restated to show what the Group’s results would have been if the new accounting standards had been applied in that year. Before the fiscal year ended March 31, 2009, net sales and operating income have been stated incompliance with previous accounting rules. In addition, the corporate reorganization was conducted effective on October 1, 2012 in order to enforce the Pharmaceutical-Related business and build a strong cooperative relationshipamong the Medical-Related, Pharmaceutical-Related and the Glass-Related businesses. As a result of this reorganization, some business divisions included in the Glass-Related business were changed to the Pharmaceutical-Related
business. The segment information is presented as if the aforementioned reorganization had been conducted at the beginning of the financial year 2012, and the presentations for the prior financial years are not restated. Also,
effective on the half year ended September 30, 2014, 13 subsidiaries including Nipro Glass France S.A.S., Nipro Glass Belgium N.V., Nipro Glass Germany AG, Nipro Sterile Glass Germany AG, and Nipro Glass Americas Corporation
were reclassified from the Medical-Related Business to the PharmaPackaging-related Bussiness, which was formerly known as the Glass-Related Business by the corporate reorganization. Segment information after 2014 is basedon this reclassification.
From the fiscal year ended March 31, 2019, the Company has conducted reorganization for the purpose of doing the synthetic PharmaPackaging business and increasing synergies for the Pharmaceutical-Related business. As
a result of this reorganization, some business divisions included in Pharmaceutical-Related business were changed to PharmaPackaging business.Effective the fiscal year ended March 31,2022, Nipro JMI Pharma Ltd. was reclassified
from the Medical-Related Business to the Pharmaceutical-related Business. The presentations for prior fiscal years are not restated.
(*2) Operating income at the operating segment level is not adjusted for intra-segment transactions. See Note 13. “Segment Information” in the consolidated financial statements.

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Social Bond
ReportingManagement
Foundation

Financial/Data
Section50

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Te n-Year Summa r y

Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31

Per Share Data:

Basic earnings

Diluted earnings

Cash dividends
EquityNumber of common shares issued

Number of employees

Selected Data and Ratios:
Equity ratio (*3) (%)

Return on assets (*3) (%)

Return on equity (*3) (%)

Price earnings ratio (*3) (times)

2023
¥

2022

2021

2020

2019

Yen

2018

2017

2016

2015

82.5 ¥

87.1 ¥(75.3) ¥73.6 ¥

71.1 ¥

67.5 ¥

116.2 ¥

81.0 ¥

22.0

27.0

28.0

13.5

28.0

28.5

29.0

33.5

32.5

77.4

—

—

66.7

64.5

61.3

114.7

2023

2014

28.0 ¥
24.8

U.S. dollars(Note 1)

18.2

—

16.3

30.5

1,265.0

1,135.7

987.3

912.2

990.1

1,037.2

999.5

977.6

988.8

832.1

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

20.1

19.9

18.8

17.9

19.1

20.9

22.1

23.4

24.1

20.2

9.2

(7.9)

6.8

11.8

38,770

0.5

2.3

36.3

36,259

1.5

7.8

12.4

35,251

1.7

15.3

32,786(1.5)—

29,325

1.5

7.3

19.3

28,330

1.5

7.0

21.6

27,415

1.6

23.2

24,2432.8
9.2

23,153

1.9
8.5

14.1

$

0.21

0.19

0.16
9.47

21,826

—

0.5

—

50.9

—

2.3

—

(*3) Equity ratio is the ratio of the sum of the total shareholders’ equity and accumulated other comprehensive income to total assets at the period end. Return on assets is the ratio of net income attributable to owners of the parent
for the period to average of total assets during the period. Return on equity is the ratio of net income for the period to average of the sum of total shareholders’ equity and accumulated other comprehensive income during theperiod. The price earnings ratio is the ratio of the closing price of the Company’s shares listed on the First Section (Now Prime Market) of the Tokyo Stock Exchange on the last trading day in March of each year to the basic earnings
per share.
(*4) Until fiscal 2016, yen amounts are rounded to the nearest million yen. Since fiscal 2017, yen amounts are rounded down to the nearest million yen.
(*5) The Group formally adopted the Accounting Standards for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020; hereinafter “Revenue Recognition Standard”) on April 1, 2021, the start of the current fiscal year. Revenue
is recognized when control is transferred to the customer, i.e., when delivery is completed.

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section51

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

C o n so l id ated Ba lanc e Sh ee ts
Nipro Corporation and its Consolidated Subsidiaries
As of March 31, 2023 and 2022

AssetsCurrent assets:
Cash and deposits
Trade notes and accounts receivable
Goods and products
Work in progress
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total current assets
Tangible assets (Note 4):
Buildings and structures
Accumulated depreciation and impairment
Buildings and structures (net)
Machinery and equipment
Accumulated depreciation and impairment
Machinery and equipment (net)Land
Lease assets
Accumulated depreciation
Lease assets (net)
Construction in progress
Other tangible fixed assets
Accumulated depreciation and impairment
Other tangible fixed assets (net)Total tangible fixed assets
Intangible assets (Note 4):
Goodwill
Lease assets
Other intangible assets
Total intangible assets
Investments and other assets:
Investment securities (Note 5):
Deferred tax assets (Note 3)
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

2023¥

Millions of yen

89,678160,271
137,774
17,42752,59235,701(4,157)489,289¥2022

95,342140,285
118,315
15,02842,801
27,506(1,821)
437,459

Thousands of
U.S. dollars (Note 1)

2023

$

671,597
1,200,267
1,031,786
130,514393,866
267,370(31,135)
3,664,267¥ 287,677(147,531)
140,145
360,642(265,162)
95,48047,12335,947(13,115)
22,831
103,336
89,858(66,224)
23,633
432,550¥ 264,032(136,425)
127,606
328,271(244,162)
84,10851,77631,892(9,233)22,65970,28180,978(59,660)
21,318377,752$ 2,154,402(1,104,858)
1,049,543
2,700,832(1,985,787)
715,045
352,902269,207(98,221)
170,985
773,879
672,946(495,953)
176,9933,239,350¥

14,514
2,302
17,18734,004¥

15,0602,905
14,84432,810$37,22010,37730,267(6,309)71,555¥ 538,109¥1,027,399¥

45,00812,39331,052(6,154)82,299¥ 492,862¥ 930,321$¥

The accompanying notes are an integral part of these statements.

108,699
17,240128,715
254,655

278,745
77,714
226,668(47,254)535,873$ 4,029,880$ 7,694,147

Liabilities and net assets
Current liabilities:
Trade notes and accounts payable
Short-term debt (Notes 4 and 8)
Commercial paper
Current portion of corporate bonds (Notes 4 and 8)
Current portion of lease obligations
Accrued payables
Income taxes payable
Advance received
Unearned revenue
Provision for bonuses
Provision for directors’ bonuses
Provision for loss on disaster
Notes payable-facilities
Other current liabilities
Total current liabilities

Long-term liabilities:
Corporate bonds
Convertible bond-type bonds with subscription rights
to shares
Long-term debt (excluding current portion)(Notes 4 and 8)
Lease obligations (excluding current portion) (Note 8)
Deferred tax liabilities (Note 3)
Liabilities for retirement benefits (Note 9)
Provision for directors’ retirement benefits
Provision for share awards for directors (and other officers)
Provision for loss on lawsuits
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets (Note 11):
Shareholders’ equity
Capital stock
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income (loss)
Net unrealized gains on available-for-sale securities
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

2023

Millions of yen

2022

Thousands of
U.S. dollars (Note 1)

2023

76,141
130,570
10,0002,000
4,440
23,153
4,897
426
578
5,955
13
—
10,191
34,542¥ 302,910¥ 73,544
150,675
—
2,200
3,885
24,601
5,528
2,115
284
5,239
166
130
5,882
37,738311,993$ 570,217
977,833
74,88914,97733,253
173,394
36,6793,193
4,329
44,598102—
76,323
258,685
2,268,479¥

76,700¥ 78,700$ 574,402

316,555

267,6142,370,672¥

30,21030,270226,241

25,265
1,276
5,164
686
11
153
26,291¥ 482,315
785,225

25,626
617
5,927
697
11
102
8,893
¥418,460
730,453

189,215
9,557
38,673
5,144
84
1,147
196,899$3,612,038
5,880,517¥

84,397
95,521(10,748)
169,170¥ 84,397
94,667(10,748)
168,316$ 632,051
715,347(80,498)
1,266,901

7,162
(47)
28,716
1,315
37,14735,856242,173¥1,027,399

9,789
(108)
6,885
356
16,922
14,628
199,867¥930,321

53,637(352)
215,057
9,850
278,192
268,535
1,813,629$7,694,147

The accompanying notes are an integral part of these statements.

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Review ofOperations

C o n so l id ated Sta tements o f Inco m eMillions of yen

Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity method
Bond issuance costs
Hyperinflation accounting adjustment
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of fixed assets
Government subsidies
Gain on sales of investment securities
Other
Total extraordinary income

Extraordinary loss
Loss on sales of fixed assets
Loss on retirement of fixed assets
Impairment losses
Loss on tax purpose reduction entry of fixed assets
Provision for allowance for doubtful accounts
Loss on disaster
Compensation for damages
Loss on valuation of inventories
Loss on litigation
OthersTotal extraordinary loss

Profit before income taxes
Income taxes
Income taxes-deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Management
Foundation

Financial/Data
Section52

2023¥545,199
381,749¥163,449

2022¥494,789
345,519¥149,269

145,720

125,386

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2023 and 2022
Thousands of
U.S. dollars (Note 1)

2023$4,082,970
2,858,904$1,224,066
1,091,291¥ 17,729¥ 23,882$ 132,776

¥

¥

$

1,096
1,394
2,125
2,686
7,302

669
1,246
4,833
3,776
10,5258,208
10,446
15,915
20,116
54,685

4,501
1,451
—
1,007
2,723
9,684
¥ 15,346

4,135
918
54
—
1,716
6,825
¥ 27,583

33,713
10,871—
7,546
20,39472,530$ 114,930

2,548
785
1,954
487
5,775

405
279
109
48
842

19,084
5,883
14,635
3,652
43,254

3
568
768
785
140
99
549
—
448
981
4,345

47
579
2,514
194
560
174
—
558
385
166
5,182

28
4,257
5,757
5,883
1,048
745
4,112
—
3,359
7,350
32,540¥¥ 16,777
6,790
4,052
10,843
5,934
1,359
4,574

The accompanying notes are an integral part of these statements.

¥¥ 23,243
7,868
308
8,177
15,066
1,611
13,455

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Consolidated Statements of Comprehensive Income

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2023 and 2022

Selling, general and administrative expenses(Notes 14 and 15)
Operating income

Social Bond
Reporting

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Net sales (Note 17)
Cost of sales
Gross profit

Outline of theMedium-Term
Management Plan$

$ 125,644
50,85330,351
81,20444,440
10,18634,255

Net income

Other comprehensive income:

2023

Millions of yen¥ 5,934

2022

Thousands of
U.S. dollars (Note 1)

2023¥15,066$ 44,440

709(19,680)

Unrealized gain (loss) on available-for-sale securities(2,627)

Foreign currency translation adjustment

20,05815,770150,216

Share of other comprehensive income of entities
accounted for using equity method

1,558

533

11,675

Deferred gains (losses) on hedges

Remeasurements of defined benefit plans
Total other comprehensive income

91

965

20,046(141)
49

16,921

688

7,229

150,128

Comprehensive income¥25,980¥31,987$194,568

Owners of parent

24,79830,036

185,718

Comprehensive income attributable to:Non-controlling interests

The accompanying notes are an integral part of these statements.

1,181

1,951

8,850

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Social Bond
Reporting

Financial/Data
Section53

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

C o n so l id ated Sta tements o f Cha nge s in N et Ass e ts
Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2023 and 2022 consisted of the following:

Balance at March 31, 2021
Cumulative effects of changes in accounting policies
Restated balance
Cash dividends
Net income attributable to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Change in the scope of consolidation
Change in parent’s ownership interest due totransactions with non-controlling interests
Decrease of retained earnings (Other)
Other net change during the year
Total changes during period
Balance at March 31, 2022
Hyper Inflation Adjustment
Restated balance
Cash dividends
Net income attributable to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Change in the scope of consolidation
Change in parent’s ownership interest due totransactions with non-controlling interests
Decrease of retained earnings (Other)
Other net change during the year
Total changes during period
Balance at March 31, 2023

Capitalstock

CapitalsurplusRetainedearnings¥84,397¥¥87,326(125)
87,201(5,238)13,45584,397

4
4

0
(4)
—

—
¥84,397¥

84,397

(4)
—
—

(0)
(296)
—
¥84,397
Capitalstock

Balance at March 31, 2022
Hyper Inflation Adjustment
Restated balance
Cash dividends
Net income attributable to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Change in the scope of consolidation
Change in parent’s ownership interest due totransactions with non-controlling interests
Decrease of retained earnings (Other)
Other net change during the year
Total changes during period
Balance at March 31, 2023

Millions of yen$632,051¥(10,748)
(0)
0

7,465
¥94,667
1,140
95,807(4,256)
4,574
(241)
(363)

—
—

(286)
¥95,521(750)(0)¥(10,748)(10,748)(0)0(0)¥(10,748)$$708,956
8,541
717,498(31,873)
34,260$(80,495)0(80,495)(2,216)$(1,811)

2,216(2,720)0—(2,145)$715,353

7,461¥168,316
1,140
169,456(4,256)
4,574
(0)
0
(241)
(67)

Treasurystock—

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustments

Accumulated
retirement
benefitadjustments

Total
accumulated
other comprehensive income

Noncontrollinginterests

45¥13,027

9,080

(34)

(9,321)319

45

13,027¥ 9,080¥ (34)¥ (9,321)

¥ 319

¥

(2)
0

(286)
¥169,170
Total
shareholders’equity$1,260,512
8,541
1,269,054(31,873)
34,260(2)
0(1,811)709
709¥ 9,789(74)(74)¥(108)

16,206
16,206¥ 6,885

36
36
¥ 356

16,877
16,877¥16,922

1,601
1,601
¥14,628

9,789

(108)

6,885

356

16,922

14,628(2)$(80,498)(2,147)$1,266,906¥174,053(125)
173,927(5,238)13,455
(0)
0
(4)
(750)
18,47825,940¥199,867
1,140
201,008(4,256)
4,574
(0)
0
(241)
(296)

(2,627)(2,627)¥ 7,16261
61¥ (47)

21,83021,830¥28,716

959
959¥1,315

20,224
20,224¥37,147

21,22821,228¥35,856

Net unrealized
gains (losses)
on available-forsale securities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustments

Accumulated
retirement
benefitadjustments

Total
accumulated
other comprehensive income

Noncontrollinginterests$126,735$109,551

73,316(815)

51,566

2,667

126,735

109,551

Thousands of U.S. dollars (Note 1)$ 73,316$(815)$ 51,566$2,667(2,216)
(503)

Total
net assets

—

(296)

Retainedearnings—¥160,980(125)
160,854(5,238)13,455(0)
0(4)

Net unrealized
gains (losses)
on available-forsale securities

—

(750)

296

0

The accompanying notes are an integral part of these statements.

¥(10,748)

Capitalsurplus632,0510$632,051

Treasury
stock

Total
shareholders’equity(67)
41,452
41,165¥242,173
Total
net assets$1,496,799
8,541
1,505,341(31,873)
34,260(2)
0(1,811)(2,216)(19,679)(19,679)$ 53,637

462
462$(352)

163,490
163,490$215,057

7,183
7,183
$9,850151,457
151,457$278,192

158,978
158,978$268,529(503)
310,435
308,288$1,813,629

NIPRO Annual
NIPRO
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section54

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
C
Consolidated
onsolidated Statementsof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

C o n so l id ated Sta tements o f Ca s h F lows
Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2023 and 2022

Operating activities:
Profit before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Share of loss (profit) of entities accounted for using
equity method
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in liabilities for retirement benefits
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Government subsidies
Loss on tax purpose reduction entry of fixed assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Decrease (increase) in other assets
Increase (decrease) in other liabilities
Other loss (gain)
SubtotalInterest and dividends received
Interest expenses paid
Other proceeds
Other payments
Income taxes paid
Income taxes refund
Cash flows from operating activities
Investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Payments for purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Purchase of investments in capital of subsidiaries
Proceeds from sales of investments in affiliates
Payments for acquisition of shares in subsidiaries
resulting in change in scope of consolidation
Payments for acquisition of business
Payments for purchase of fixed assets
Proceeds from sales of fixed assets
Payments for retirement of fixed assets

2023

Millions of yen

2022

Thousands of
U.S. dollars (Note 1)2023¥ 16,777
46,275768
2,468¥ 23,243
43,3132,514
2,851$ 125,644
346,557
5,756
18,4891,897
377(2,490)
4,501(7,102)(1,946)—(785)
785(11,113)(25,018)(5,781)(6,439)7,050
593
22,2692,304(4,251)868(1,482)(9,568)255
10,395804
96(1,916)
4,135(3,545)
(107)
41
(150)
194
6,659
(7,935)
704
3,159
453
815
76,250
1,902(3,981)695(1,326)(6,088)762
68,214

14,2102,828(18,654)0(53,192)
30,350(53,192)(5,883)
5,883(83,228)(187,365)(43,296)(48,223)
27,781
0
166,773
17,255(31,840)
6,507(11,102)(71,659)
1,916
77,849(2,036)
2,546
(51)
4,979
(952)
—
—

(2,921)
2,586
(253)
262
(192)
(70)
2,845

(15,254)
19,072(385)
37,287(7,129)——(26)(84,835)
10,799(256)(24)(79,803)
4,278
(154)

(195)
(635,327)
80,873(1,921)

1,451(2,076)918(5,187)

10,870(15,551)

Investing activities:
Proceeds from capital investment subsidies
Net decrease (increase) in short-term loans receivable
Payments for loans receivable
Proceeds from collection of loans receivable
Other payments
Other proceeds
Cash flows from investing activities

Financing activities:
Net increase (decrease) in short-term debt
Net increase (decrease) in commercial paper
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Payments for redemption of bonds
Proceeds from issuance of stock
Proceeds from sale of treasury stock
Payments for purchase of treasury stock
Proceeds from sale and leaseback
Payments for repayment of finance lease obligations
Cash dividends paid
Proceeds from share issuance to non-controllingshareholders
Dividends paid to non-controlling interests
Payments for acquisition of subsidiaries’ stock withoutchange in scope of consolidation
Payments for acquisition of investments in subsidiaries
not involving a change in the scope of consolidation
Repayments of installment payables
Other
Cash flows from financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly
consolidated subsidiaries
Ending balance of cash and cash equivalents

2023

Millions of yen

Thousands of
U.S. dollars (Note 1)

2023

2022

10
23
(140)
216
(10)
72
(71,737)

¥

269
295
(360)
7
(12)
—
(78,434)$(15,116)
10,000115,025(74,963)—(2,200)19,7300(1)
214(4,064)(4,247)

26,860—61,470(100,836)
35,245(1,600)—0(2)
28(4,571)(5,224)(113,210)
74,889861,421(561,396)—(16,475)
147,757
0
(14)
1,604
(30,440)(31,809)

(141)

(69)

(1,059)

¥

—

8

0

(315)

(299)

(2,360)

—

(713)

—

(840)
(0)
43,077——
10,297(6,297)(6)
322,602

12,875

4,161

96,427(5,389)90,07113¥ 84,695

The accompanying notes are an integral part of these statements.

81
174(1,048)
1,620
(78)
541
(537,240)¥

4,239
85,821(40,360)
674,541

90,071$ 634,283

9102

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionFinancial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

55
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N o tes to Consolidated Fina ncia l S ta tem ents
1. Basis of Presenting Consolidated Financial Statements

The financial statements of Nipro Corporation (“the Company”) and its consolidated domestic
subsidiaries have been prepared in accordance with the provisions set forth in the Financial
Instruments and Exchange Law of Japan and its related accounting regulations, and in
conformity with accounting principles generally accepted in Japan, which are different incertain respects as to application and disclosure requirements of International Financial
Reporting Standards. Effective from the year ended March 31, 2009, the Company has
adopted the “Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements” (PITF No. 18) and as a result, the accountsof consolidated overseas subsidiaries are prepared in accordance with either International
Financial Reporting Standards or generally accepted accounting principles in the UnitedStates, with adjustments for the specified four items as applicable.
In preparing the accompanying consolidated financial statements, certain reclassifications
have been made to the consolidated financial statements issued domestically. However, no
adjustment has been made which would change the financial position or the results ofoperations presented in the original financial statements.
The financial statements presented herein are expressed in Japanese yen and, solely forthe convenience of the reader, have been translated into United States dollars at the rate of¥133.53 = US$1, the approximate exchange rate on March 31, 2023. These translations should
not be construed as representations that the Japanese yen amounts have been, could havebeen, or could in the future be, converted into U.S. dollar amounts at that or any other rate.
Amounts of less than one million yen and one thousand U.S. dollars are rounded down to
the nearest million yen and thousand U.S. dollars, respectively, in the presentation of theaccompanying consolidated financial statements. As a result, the totals in yen and U.S. dollars
do not necessarily agree with the sum of the individual amounts.

2. Summary of Significant Accounting Policies(a) Basis of Consolidation

The consolidated financial statements include the accounts of the Company and the significant
subsidiaries and affiliated companies accounted for by the equity method.
Investments in unconsolidated subsidiaries are stated at cost and the equity method is
not applied for the valuation of such investments since they are considered immaterial in
the aggregate.
All significant intercompany balances and transactions have been eliminated inconsolidation. All material unrealized profits included in assets resulting from transactions
within the Company and its consolidated subsidiaries have been eliminated. The difference
between the cost of investments in subsidiaries and affiliates and the equity in their net assets
at the dates of acquisition is amortized on a straight-line basis over five to 20 years.
All accounts herein have been presented on the basis of the 12 months ended March 31,
2023 for the Company and for consolidated domestic subsidiaries, and December 31, 2022
for all consolidated overseas subsidiaries.
Adjustments have been made for any significant intercompany transactions which took
place during the period between the end of the accounting period of the consolidated
overseas subsidiaries and that of the Company.

(b) Translation of Foreign Currencies

Balance sheets of consolidated overseas subsidiaries are translated into Japanese yen at thecurrent exchange rates as of the balance sheet date except for shareholders’ equity, which istranslated at the historical rates. Income statements of consolidated overseas subsidiaries
are translated into Japanese yen at the average exchange rates for the period. Resulting
translation adjustments are shown as “Foreign currency translation adjustments” in the“Accumulated other comprehensive income” section of net assets.

(c) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, readily available deposits and short-term
highly liquid investments with original maturities of three months or less.

(d) Allowance for Doubtful Receivables

An allowance for possible losses from trade notes and accounts receivable, loans and otherreceivables is provided based on the actual rate of past bad debts and the uncollectible
amounts of certain individual receivables.

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionFinancial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

56
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts(e) Inventories

Inventories are stated principally at the lower of average cost or net realizable value.

(f) Property, Plant and Equipment

Depreciation of property, plant and equipment of the Company and its consolidated domestic
subsidiaries is computed principally by the declining-balance method. The straight-line
method is applied to buildings acquired by the domestic companies after April 1, 1998 andbuildings and accompanying facilities and structures acquired by the domestic companies
after April 1, 2016, and is principally applied to the property, plant and equipment ofconsolidated overseas subsidiaries.

(g) Intangible Assets

Amortization of intangible assets, including software for the Company’s own use, is computedby the straight-line method over the estimated useful life of the asset.
Goodwill is amortized on a straight-line basis over the period the Company benefits fromits use. If the amount is not significant, it is expensed when incurred.

(j) Derivatives

Derivatives are stated at fair value, with changes in fair value included in net income or loss
for the period in which they arise, unless derivatives are used for hedging purposes. Pleasesee (l) Hedge Accounting below.

(k) Leases

Finance leases, except for certain immaterial leases, are capitalized in the balance sheet.
Amortization of finance lease assets is calculated by the straight-line method over the lease
period assuming no residual value.
The Company and its consolidated domestic subsidiaries account for certain financeleases as operating leases, which do not transfer ownership to the lessee.

(l) Hedge Accounting

Available-for sale securities, which are not classified as either trading securities or held-tomaturity debt securities, are stated at fair value. Unrealized gains and losses, net of applicabletaxes, are reported as “Accumulated other comprehensive income” of net assets.
Non-marketable available-for-sale securities are stated at a cost determined by theaverage method.
For other-than-temporary declines in fair value, investment securities are reduced to net
realizable value by a charge to income.

<Method of hedge accounting>
The deferral hedge accounting method is applied in principle. The exceptional accounting
method is applied to interest rate swaps when certain hedging criteria are met.
<Hedge instrument and hedge items>(Hedging instruments) (Hedged items)
Interest rate swap
Interest on short-term and long-term debt
<Hedge policy>
The Company uses interest rate swaps to reduce interest volatility risk.
<Method for assessing hedge effectiveness>
Hedge effectiveness is not assessed when substantial items and conditions of hedging
instruments and the hedged transactions are the same, and is not assessed when cash
flow can be completely offset for a whole hedge period.

(i) Employees’ Retirement and Severance Benefits(m) Income Taxes

Accounting Method of Actuarial Gains and Losses and Prior Service Costs are amortized ona straight-line basis over a certain period (mainly 5 years) which is within the average of theestimated remaining service years of employees when they occur.

(n) Amounts per Common Share(h) Investment Securities

Method of Attributing Expected Benefit to Periods
In calculating retirement benefit obligation, the estimated amount of retirement benefit isattributed to the periods on the benefit formula basis.

Actuarial gains and losses are amortized on a straight-line basis over a certain period (mainly
5 years) which is within the average of the estimated remaining service years of employees
commencing from the following year in which they arise.
Some consolidated subsidiaries amortize their actuarial gains and losses all at once in thefiscal year in which they arise.

The provision for income taxes is computed based on income for financial statement purposes.
The asset and liability approach is used to recognize deferred tax assets and liabilities for the
future tax consequences of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Basic earnings per share are computed by dividing net income available to commonshareholders by the weighted average number of common shares outstanding for the period.
Diluted earnings per share reflect the potential dilution that could occur if securities were
exercised or converted into common stock. Diluted earnings per share of common stock
assume full conversion of the outstanding convertible notes and bonds at the beginning of
the year (or at time of issuance) with an applicable adjustment for related interest expense,
net of tax, and full exercise of outstanding warrants.

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section57

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts(o) Revenue Recognition

Revenue is recognized upon delivery of products sold. The customer acquires ownership andcontrol of the products upon delivery. The Group has fulfilled its performance obligation at
this time.
Other Revenue Sources• As an agent
When the Company acts as an agent, revenue is recognized on a net basis.
• Repurchase agreements
Liability is recognized for the amount of the remaining inventory of the goods to be supplied
to the buyer.
Revenue is the contract price less returns, discounts, and rebates.
Accounts receivable are all current. All are collected within a year from the delivery date.

(p) Change in Accounting Policies

Application of Accounting Standard for Fair Value Measurement
Effective April 1, 2022, the Group has applied the “Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 31, June 17, 2021). The Group has applied new accounting
policy prospectively in accordance with the transitional treatment prescribed in Paragraph27-2 of the Accounting Standard for Fair Value Measurement. There is no impact on the
consolidated financial statements.
Additional Information
Turkish Subsidiary—Application of International Audit Standard 29 on Financial Reporting inHyperinflationary Economies (IAS 29)
IAS 29 was applied to the Turkish subsidiary as of April 1, 2022 as Turkey’s cumulative
inflation rate over the past three years exceeded 100%. As a result, retained earnings increasedby ¥1,140 million (US$8 million) at the start of the current fiscal year (FY2023). The impact ofinflation on the net monetary position for the FY2023 is presented as “Inflation accounting
adjustments” under “Non-operating expenses.”

3. Income Taxes

The Company and its domestic subsidiaries are subject to several taxes based on income
which, in aggregate, resulted in a normal statutory tax rate of approximately 30.6% for theyears ended March 31, 2023 and 2022.
The significant components of deferred tax assets and liabilities were as follows:

Deferred tax assets
Tax loss carryforwards
Intercompany profits
Valuation loss on inventories
Allowance for bonuses to employees
Sales allowance
Loss on impairment of fixed assets
Excess of allowance for doubtful accounts over tax
allowable amounts
Net defined benefit liability
Accrued enterprise taxes
Accrued expense
Accrued bonus
Research and development costs
Other
Gross deferred tax assets
Less: Valuation allowance for the Net Operating Loss
Carry Forwards
Less: Valuation allowance for the deductible temporary
differences
Total Less: Valuation allowance (*1)
Total deferred tax assets
Offsetting deferred tax liabilities
Net deferred tax assets
Deferred tax liabilities
Unrealized gain on available-for-sale securities
Revaluation reserve for land
Revaluation reserve for fixed assets—other
Retained earnings on foreign subsidiaries
Other
Total deferred tax liabilities
Offsetting deferred tax assets
Net deferred tax assets (liabilities)

2023

Millions of yen

2022

Thousands of
U.S. dollars (Note 1)2023¥ 24,486
2,320
2,176
1,442
467
1,980

¥ 24,021
3,113
1,847
1,365
427
2,082

$ 183,377
17,37416,30010,806
3,503
14,829

1,515
226
409
—
920
5,815
44,209

1,464
415
602
1,856
570
5,406
45,425

11,350
1,698
3,062
—
6,893
43,548331,085

2,471(18,869)(6,568)2,257(19,211)(5,788)18,509(141,313)(49,190)(25,438)
18,771(8,394)
10,377(24,999)
20,425(8,032)
12,393(190,504)
140,581(62,867)
77,714

3,207
783
531
903
4,243
9,670
(8,394)¥ 1,276

4,369
783
534
774
2,187
8,649
(8,032)¥617

24,019
5,866
3,983
6,769
(26,604)
14,034(62,867)$9,557(*1) In the fiscal year ended March 31, 2023, Valuation allowance was increased by ¥438 million. The main reason for this increaseis that Valuation allowance for the Net Operating Loss Carry Forwards was increased by ¥180 million in Nipro Vietnam Company
LIMITED.

Contents

NIPRO
NIPRO Annual
Annual Report
Report 2023
2023

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
Section58

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
Reconciliation of the differences between the statutory tax rates and the effective income tax rates
were as follows:
2023

Statutory tax rate

30.6%

Non-taxable dividend income

(1.2)

(0.2)

1.0

Inhabitant tax on per capita basis

4.5

Amortization of goodwill(3.7)

Tax credits primarily for research and development costs
Valuation allowance

17.6

Unrealized Gain

6.4

0.8

Retained earnings on foreign subsidiaries
Prior tax expense

3.6

Equity in losses of affiliates

2.7

2.3

Effect of hyperinflationary accounting

(1.5)

Other

64.6%

Effective income tax rate

1.0

0.7
3.2

(4.3)
9.2
0.7

(0.7)
0.4
—

1.3

(6.7)

35.2%

Millions of yen

2023

Within1 yearOver 2 years
within3 years

Over 3 years
within4 years

Over 4 years
within5 years

Over 5 years

Net Operating Loss
Carry Forwards (*A)

Over 1 year
within2 years

¥ 288

¥ 574

¥1,289¥1,160¥ 1,122¥ 20,050¥ 24,486

Deferred Tax Assets

(288)
—

(515)

(923)

(909)

(1,011)(15,220)(18,869)

Valuation allowance

58

365

250

111

4,830

Total

5,616 (*B)

Over 2 years
within3 years

Over 3 years
within4 years

Over 4 years
within5 years

Over 5 years

Net Operating Loss
Carry Forwards (*A)

Over 1 year
within2 years$ 2,161$ 4,301$ 9,654$ 8,691$ 8,410$ 150,158$ 183,377

Deferred Tax Assets(2,161)—(3,863)(6,915)(6,812)(7,575)(113,985)(141,313)

Valuation allowance

437

Within1 yearOver 2 years
within3 years

Over 3 years
within4 years

Over 4 years
within5 years

Over 5 years

Net Operating Loss
Carry Forwards (*A)

Over 1 year
within2 years

¥ 555

¥ 398

¥ 629

¥1,136¥ 1,391¥ 19,911¥ 24,021

Deferred Tax Assets

(393)
161

(351)

(568)

(788)

(1,151)(15,958)(19,211)

Valuation allowance

47

60

348

239

3,952

Total

4,810 (*B)

2,738

1,878

834

36,173

Total

42,063 (*B)(*A) Each Net Operating Loss Carry Forwards amount is multiplied by Statutory tax rate.
(*B) Deferred Tax Assets for Net Operating Loss Carry Forwards (multiplied by Statutory tax rate) for the years ended March 31, 2023
and 2022 were ¥24,486 million (US$183,374 thousand) and ¥24,021 million, respectively. Those Deferred Tax Assets weremainly recognized for the balance of Net Operating Loss Carry Forwards (multiplied by Statutory tax rate) in Nipro Holding
Americas, Inc. As a result of tax scheduling, Valuation allowance for those Net Operating Loss Carry Forwards was not recognized
due to assumption that this amount is collectable.

4. Pledged Assets

The following assets were pledged as collateral:
2023

Millions of yen

2022

Thousands of
U.S. dollars (Note 1)

2023

Buildings and structures¥3,208¥1,975$24,028

Land

3,112

2,929

23,312

Machinery and equipment

Other

Total

1,571
641

¥8,534

1,198
532¥6,636

The above assets were pledged against the following liabilities:

Millions of yen

2022

2023

Within1 year

2022

30.6%
1.5

Expenses not deductible for tax purposes

Thousands of U.S. dollars (Note 1)

2023

Millions of yen

2022

11,7704,800$63,911

Thousands of
U.S. dollars (Note 1)

2023

Short-term debt

¥ 695

¥ 768

$ 5,205

Long-term debt (excluding current portion)

6,136

4,793

45,954Current portion of long-term debt
Total

893

¥7,724515¥6,077

6,692$57,851NIPRO Annual
NIPRO
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Social Bond
ReportingManagement
Foundation

Financial/Data
Section59

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
C
Consolidated
onsolidated Statementsof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
5. Investment Securities

Proceeds from sales of securities and gross realized gains or losses on those sales for theyears ended March 31, 2023 and 2022 were as follows:

Investment securities as of March 31, 2023 and 2022 consisted of the following:2023

Non-current:

Millions of yen

Thousands of
U.S. dollars (Note 1)

2023

2022

Proceeds

Gains on sales

Marketable:

Marketable equity securities¥24,593¥31,466$184,176

Subtotal

24,593

31,466

184,176—

Investment trust funds and other2,489

Non-marketable securities

Investments in unconsolidated subsidiaries andaffiliates accounted for by equity method
Total

—

—

18,642

2,561

10,138

10,97975,926¥37,220¥45,008$278,745

The carrying amounts and aggregate fair values of marketable securities for investments asof March 31, 2023 and 2022 were as follows:
Millions of yen

Available-for-sale securities
Equity securities

Debt securities and other
Total

2023

Cost

Unrealized gain

Unrealized loss

Fair Value¥14,324¥10,638¥369¥24,593¥14,324¥10,638¥369¥24,593

—

—

—

—

Millions of yen

Available-for-sale securities
Equity securities

Debt securities and other
Total

2022

Cost

Unrealized gain

Unrealized loss

Fair Value¥17,397¥14,517¥448¥31,466¥17,397¥14,517¥448¥31,466

—

—

—

—

Thousands of U.S. dollars (Note 1)

Available-for-sale securities
Equity securities

Debt securities and other
Total

2023

Cost

Unrealized gain

Unrealized loss

Fair Value$107,274$79,669$2,767$184,176$107,274$79,669$2,767$184,176

—

—

—

—

Losses on sales

2023

Millions of yen¥5,020

1,954
7

2022

Thousands of
U.S. dollars (Note 1)

2023

¥262

$37,599

1

58

13

14,634

No impairment loss was applied to securities in the fiscal year ended March 31, 2023.
In the case that fair value for the marketable equity security fell by over 50% from theacquisition cost, the stock impairment is applied unless there is a reasonable disproval, andthe asset is treated as an impairment. In the case that fair value for the marketable equity
security fell by 30% to 50%, impairment is applied except when it is expected to recover.

6. Financial Instruments(1) Circumstances on financial instruments(a) Policy for financial instruments
The Company and its consolidated subsidiaries manage the temporary surplus funds bydeposits with banks that have a high level of safety. Based on capital investment planning andfinancing planning, the Company and its consolidated subsidiaries raise funds for business
operation with bank loans, commercial paper, corporate bonds, and issuing convertible bonds
with stock acquisition rights.
The Company and its consolidated subsidiaries enter into derivative transactions for the
purpose of reducing funding costs and hedging their exposures to foreign exchange
fluctuations and interest rate fluctuations, but not for speculative purposes.

NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section60

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts(b) Details and risk of financial instruments and its risk management
Receivables such as trade notes and accounts receivable are exposed to customer’s credit
risk. Receivables denominated in foreign currencies are exposed to the market risk offluctuation in foreign currency exchange rates.
In order to reduce the customer’s risk, the Company monitors the dues and balances bycustomer in accordance with the Company’s credit administration regulations.
Investment securities are exposed to market fluctuation risk, but mainly consist of equityof the companies which conduct business with the Company. The Company periodicallyreviews the market price of such securities.
Payables such as trade notes, accounts payable, and accounts payable other are due
within 1 year.
Payables denominated in a foreign currency are exposed to the risk of fluctuation in foreign
currency exchange rates.
Short-term loans payable are mainly borrowed to raise operating capital and long-termloans payable are mainly borrowed to make capital expenditures. A part of long-term loans
with a floating interest rate has the risk of interest rate fluctuation, but the Company and its
consolidated subsidiaries use interest rate swaps to solidify the interest rate. For some of theloans denominated in a foreign currency, the Company and its consolidated subsidiaries use
currency swaps to hedge the currency fluctuation risk.
Bonds and commercial paper are mainly issued to raise the funds for the retirement of bonds.
Lease obligations are mainly for capital expenditures, free from interest-rate risk because
the interest rate is fixed.
Payables, loans and bonds are exposed to liquidity risk, but the Company and its
consolidated subsidiaries manage the risk by establishing cash planning.
Regarding derivatives, the Company enters into forward exchange contracts to hedge
against the risk of fluctuations in foreign currency exchange rates associated with tradereceivables and payables denominated in foreign currencies, interest rate swaps to hedge
against the risk of fluctuations in interest rates associated with loans payable, and currency
swaps to hedge against the risk of foreign exchange rate fluctuations. For more informationon the use of hedge accounting, including hedging instruments, hedged items, the hedging
policy, and the method for assessment of hedge effectiveness, please refer to “2. Summaryof Significant Accounting Policies” (m) Hedge Accounting.
As the Company manages its exposure to credit risk by limiting its funding to high-credit
rating financial institutions, the Company recognizes that the exposure to credit risk isextremely low.
The Company executes and manages derivative transactions under the corporate derivative
management policy, which prescribes the authority and limitations on derivative transactions.

(c) Supplemental information on fair values of financial instruments
Fair values of financial instruments include values based on market price and reasonably
estimated values when market price is not available. Because variable factors are counted in
the estimation, the estimated values may vary by adopting different assumptions.
With respect to the contract amounts related to derivative transactions in Note 8, theamounts do not reflect market risks to derivative transactions.

(2) Fair values of financial instruments
The book values, fair values and the differences between them as of March 31, 2023 and 2022
were as follows (Financial instruments for which the market value is extremely difficult todetermine are not included as described in remark 2.):Millions of yen

2023
Book value

Fair value

Difference

Investment securities¥ 24,593¥ 24,593¥

Assets total¥ 24,593¥ 24,593¥

Corporate bonds

76,70075,469(1,230)Convertible bond-type bonds with subscription rights
to shares

30,21030,030(180)

Long-term debt (excluding current portion)

316,555

313,313(3,242)

Lease obligations (excluding current portion)

25,26524,025(1,240)Liabilities total¥448,731¥442,838¥(5,893)

Derivatives (*1)

¥

¥

¥

(27)

(27)

—
—

—

Millions of yen

2022
Book value

Fair value

Difference

Investment securities¥ 31,466¥ 31,466¥—

Assets total¥ 31,466¥ 31,466¥—

Corporate bonds

78,70077,424(1,275)

Convertible bond-type bonds with subscription rights
to shares

30,27030,645375

Long-term debt (excluding current portion)

267,614266,257(1,356)

Lease obligations (excluding current portion)

25,62623,256(2,369)Liabilities total¥402,210¥397,583¥(4,627)

Derivatives (*1)

¥

¥

¥

(167)

(167)

—

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Social Bond
Reporting

Financial/Data
SectionManagement
Foundation

61
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
Remark 3

Thousands of U.S. dollars (Note 1)

Investment securities
Assets total

Corporate bonds

Book value$ 184,176

574,402565,186$ 184,176

Derivatives (*1)

$ 184,176

226,241
189,215$3,360,532
$

(203)

Difference$$

224,8932,370,672

Long-term debt (excluding current portion)
Liabilities total

Fair value$ 184,176

Convertible bond-type bonds with subscription rights
to shares
Lease obligations (excluding current portion)

2023$3,316,395
$

(203)

—

(24,279)(9,292)$(44,136)$—(*1) The amount represents the net amount of assets (liabilities).
Cash is not disclosed. Deposits out of “Cash and deposits”, “Trade notes and accounts receivable”, “Trade notes and accounts
payable”, “Short-term bank debt”, “Commercial paper”, “Current portion of corporate bonds”, “Current portion of leaseobligations” and “Notes payable-facilities” are not disclosed because their maturities are short and the carrying values
approximate fair value.

Remark 1

Financial instruments for which the fair value is extremely difficult to determine

Unlisted equity securities

2023

Millions of yen¥12,175

2022¥12,981Millions of yen(9,215)(1,348)2,346,393
179,922—

Planned repayment amounts after the balance sheet date for monetary
payables with maturity dates
Planned repayment amounts after the balance sheet date for monetary payables with maturity
dates at March 31, 2023 and 2022 were as follows:

Thousands of
U.S. dollars (Note 1)

2023$91,182

Short-term bank debt
Commercial paper

Current portion of corporate
bonds

Current portion of leaseobligations

Corporate bonds

Convertible bond-type bonds
with subscription rights tosharesLong-term debt (excluding
current portion)

Lease obligations (excluding
current portion)
Total

Within 1 year

Over 2 years
andwithin 3 years

Over 3 years
andwithin 4 years

Over 4 years
andwithin 5 years

Over 5 years

10,000

—

—

—

—

—

¥130,570

¥

2,000

—

2023

Cash and deposits

Trade notes and accounts receivable

Within 1 year

¥ 89,678
160,271

2022

Within 1 year

¥ 95,342
140,285

Thousands of
U.S. dollars (Note 1)

2023

Within 1 year

$ 671,597
1,200,267

—

¥

—

—

¥

—

—

¥

—

—

—

4,440

—

—

—

—

—

—

4,700

1,000

1,000

—

70,000———30,000———78,92557,72349,38456,85073,672

—

3,647

2,927

1,647

1,811

15,232¥147,010¥87,272¥61,651¥82,032¥58,661¥158,904

Thousands of U.S. dollars (Note 1)

Remark 2

Millions of yen¥—

They are not included in investment securities because there were no guoted market prices available and it is extremely difficult todetermine the fair value as of March 31, 2023 and 2022.

Planned redemption amounts after the balance sheet date for monetary
receivables with maturity dates
Planned redemption amounts after the balance sheet date for monetary receivables withmaturity dates at March 31, 2023 and 2022 were as follows:

2023

Over 1 year
andwithin 2 years

Short-term bank debt
Commercial paper

Current portion of corporate
bonds

Current portion of leaseobligations

Corporate bonds

Convertible bond-type bonds
with subscription rights tosharesLong-term debt (excluding
current portion)

Lease obligations (excluding
current portion)
Total

2023

Within 1 year

Over 1 year
andwithin 2 years

Over 2 years
andwithin 3 years

Over 3 years
andwithin 4 years

Over 4 years
andwithin 5 years

Over 5 years

74,889

—

—

—

—

—

$ 977,833

$

—

$

—

$

—

$

— $

—

14,977

—

—

—

—

—

33,253

—

—

—

—

—

—

35,198

7,488

7,488

—

524,226———

224,668———

591,066

432,292

369,839425,748551,726—

27,31321,923

12,337

13,568114,072$1,100,953$653,577$461,704$614,334$439,316 $1,190,025

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Social Bond
Reporting

Financial/Data
SectionManagement
Foundation

62

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts(a) Financial instruments measured at fair value on the consolidated balance sheet

Millions of yen

Short-term bank debt

Current portion of corporate
bonds

Current portion of leaseobligations

Corporate bonds

Convertible bond-type bonds
with subscription rights tosharesLong-term debt (excluding
current portion)

Lease obligations (excluding
current portion)
Total

Within 1 year

¥150,675

Over 1 year
andwithin 2 years

¥

—

2022

Over 2 years
andwithin 3 years¥—

Over 3 years
andwithin 4 years¥—

Over 4 years
andwithin 5 years¥—

Millions of yen

¥

—

2,200

—

—

—

—

—

3,885

—

—

—

—

—

—

2,000

4,700

51,0001,000

20,000————30,000——54,00167,802

43,66239,28762,861

—

3,375

2,693

2,123

1,310

16,123¥156,760¥59,377¥75,195¥96,785¥71,597¥98,984(3) Breakdown of fair values of financial instruments by level2023

Over 5 years

The fair values of financial instruments are classified into the following three levels based on
the observability and materiality of the inputs used to calculate fair value.
Level 1: Fair value calculated based on quoted market prices for assets or liabilities for whichsuch fair value is in available in active markets among the inputs used in the calculationof observable fair value.
Level 2: Fair value calculated using inputs other than Level 1 inputs to the calculation ofobservable fair value.
Level 3: Fair value calculated using inputs that are unobservable.
When multiple inputs that have a significant effect on the calculation of fair value are used,
fair value is classified into the level with the lowest priority in the calculation of fair value
among the levels to which each of those inputs belongs.

Level 1

Investment securities
Other securities
StocksTotal assets

Derivatives transactions
Currency-relatedInterest-relatedInterest rate and currency related
Total liabilities

Level 2

Fair value

Level 3

Total

¥24,593¥ —¥—¥24,593

¥

—

¥(29)

¥—

¥

—

(5)

—

¥24,593

¥

¥ —

—

¥—

7

—

¥24,593

—

¥(27)

¥—

¥

(29)
7

(5)

(27)

Thousands of U.S. dollars (Note 1)

2023

Level 1

Investment securities
Other securities
StocksTotal assets

Derivatives transactions
Currency-relatedInterest-relatedInterest rate and currency related
Total liabilities

Level 2

Fair value

Level 3

Total

$184,176$—$—$184,176$—$(219)

$—

$

—

(40)

—

$184,176

$

—

—

$

—

$—

57

—

$(203)$—$184,176
(219)
57

(40)

$

(203)

Millions of yen

2022

Level 1

Investment securities
Other securities
StocksTotal assets

Derivatives transactions
Currency-relatedInterest-relatedInterest rate and currency related
Total liabilities

Level 2

Fair value

Level 3

Total

¥31,466¥—¥—¥31,466

¥

—

¥(79)

¥—

¥

—

(78)

—

¥31,466

¥

—

—

¥

—

(9)

¥(167)¥——¥—¥31,466

¥

(79)
(9)

(78)

(167)

NIPRO Annual
Annual Report
NIPRO
Report 2023
2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionFinancial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated
Consolidated Statementsof IncomeFinancial/Data Section

63
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts(b) Financial instruments other than those measured at fair value on the consolidatedbalance sheet
Millions of yen

2023

Corporate bonds

Convertible bond-type bonds with subscription
rights to shares
Long-term debt (excluding current portion)

Lease obligations (excluding current portion)
Total liabilities

Level 1

Level 2

Fair value¥—¥ 75,469—

Level 3Total¥—

¥ 75,469

30,030—30,030—313,313—313,313¥—¥442,838¥—¥442,838—

24,025—24,025

Thousands of U.S. dollars (Note 1)

2023

Corporate bonds

Convertible bond-type bonds with subscription
rights to shares

Long-term debt (excluding current portion)

Lease obligations (excluding current portion)

Total liabilities

Level 1$—

Level 2

Fair value$ 565,187

Level 3$—Total

$ 565,187—

224,893—

224,893—

2,346,393—

2,346,393$—$3,316,396$—$3,316,396—

179,923—

179,923

Millions of yen

2022

Corporate bonds

Convertible bond-type bonds with subscription
rights to shares
Long-term debt (excluding current portion)

Lease obligations (excluding current portion)
Total liabilities

Level 1

Level 2

Fair value¥—¥ 77,424—

Level 3

Total¥—

¥ 77,424

30,645—30,645—266,257—

266,257¥—¥397,583¥—¥397,583—

23,256—23,256(*) Explanation of valuation techniques used and inputs related to the calculation of fair value• Investment securities
The fair value of listed stocks is estimated using quoted market prices. Since listed stocks
are traded in active markets, their fair value is classified as Level 1.
• Derivative transactions
Fair value is calculated based on prices, etc., provided by financial institutions with which
the Company has transactions, and is classified as Level 2.
The fair value of interest rate swaps that qualify for special treatment is included in thefair value of the relevant long-term borrowings because they are accounted for as an integral
part of long-term borrowings that are hedged.
• Corporate bonds and Long-term debt
The fair value of corporate bonds and Long-term debt is calculated based on the present
value of the total principal and interest discounted using an appropriate index such as theyield on government bonds plus an interest rate that takes credit risk into account, and isclassified as Level 2.
• Convertible bond-type bonds with subscription rights to shares
The fair value of convertible bond with stock acquisition rights is calculated based on theprice, etc. provided by the financial institutions with which the Company has transactions
and is classified as Level 2.
• Lease obligations
The fair value of lease obligations is calculated based on the present value of the principal
and interest discounted at an interest rate that takes into account the remaining period of
the obligation and credit risk, and is classified as Level 2.

Contents

NIPRO Annual
NIPRO
Annual Report
Report 2023
2023

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section64
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
C
Consolidated
onsolidated Statementsof IncomeFinancial/Data Section

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
7. Derivatives

The Company and its consolidated subsidiaries held the following derivatives contracts
outstanding at March 31, 2023 and 2022.
Fair value is based on information provided by a financial institution at the end of the
fiscal year.

(1) Derivatives for which hedge accounting has not been applied
Currency-related(2) Derivatives for which hedge accounting has been applied(a) Currency-related

Millions of yen

2023

Method of hedge accounting

Principle method

Type of derivative

Currency swap

Principal hedge item

Contract
amount¥532

Long-term debt

Type of derivative

Non-deliverable forward

Transaction other thanCurrency swaption
market transaction
Currency swap

¥2,945
2,381
463

¥—

Fair value¥ (41)—

118—

Method of hedge accounting

Principle method

Type of derivative

Currency swap

Principal hedge item

Type of derivative

Transaction other thanForeign currency forward contracts
market transaction
Currency swap

Contract amount

¥ 575
5,027

1,035

¥—

Fair value

¥(3)

—

5

—

6

Non-deliverable forward
Transaction other thanCurrency swaption
market transaction
Currency swap

$22,056
17,8333,469

Over 1 year out-ofcontract amount

$—
—

—

¥—

Fair value¥(87)

Thousands of U.S. dollars (Note 1)

Method of hedge accounting

Principle method

Type of derivative

Currency swap

Principal hedge item

Contract
amount$3,986Long-term loans(b) Interest-relatedOver 1 year
out-of-contract
amount¥—Fair value$(868)

Millions of yen

2023

2023

Contract amountOver 1 year
out-of-contract
amount2023

Thousands of U.S. dollars (Note 1)

Type of derivative

¥505

9

2022

Non-deliverable forward

Contract
amountLong-term loans

Millions of yen
Over 1 year out-ofcontract amount¥(116)

2022

2023

Over 1 year out-ofcontract amount¥—

Fair value

Millions of yen

Millions of yen
Contract amountOver 1 year
out-of-contract
amount

Method of hedge accounting

Fair value$(312)
889

Principle method

Type of derivative

Principal hedge item

Interest rate swap Long-term loans

Exceptional accounting method
Interest rate swap Long-term loans
for interest rate swap

Contract
amountOver 1 year
out-of-contract
amount—¥ 7

15,00015,000

(*1)

¥

537

72

¥

Fair value

Millions of yen

2022

Method of hedge accounting

Principle method

Type of derivative

Principal hedge item

Interest rate swap Long-term loans

Exceptional accounting method
Interest rate swap Long-term loans
for interest rate swap

Contract
amountOver 1 year
out-of-contract
amount495¥ (9)15,00015,000(*1)¥ 1,071¥

Fair value(*1) The fair value of the interest rate swap to which the exceptional accounting method is applied and the fair value of forward
foreign exchange contracts, etc., to which the allocation method is applied are included in the fair value of long-term loans in
Note 6. “Financial Instruments” because such interest rate swaps and forward foreign exchange contract, etc., are accounted
for as a single item with the corresponding long-term loans.

Contents

NIPRO Annual
Annual Report
NIPRO
Report 2023
2023

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section65
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated
Consolidated Statementsof IncomeFinancial/Data Section

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
8. Short-Term Debt and Long-Term Debt

Thousands of U.S. dollars (Note 1)

2023

Method of hedge accounting

Principle method

Type of derivative

Principal hedge item

Interest rate swap Long-term loans

Exceptional accounting method
Interest rate swap Long-term loans
for interest rate swap$

Contract
amount4,025

112,334

Over 1 year
out-of-contract
amount$Fair value

—

$ 57

112,334(*1)
Current portion of long-term debt

Current portion of lease obligations

Millions of yen

2023

Principle method

Type of derivative

Interest rate andcurrency swap

Millions of yen

Short-term debt(c) Interest rate and currency-related

Method of hedge accounting

Short-Term Debt and Long-Term Debt comprised the following:

Principal hedge item

Long-term loans

Contract
amount¥760

Over 1 year
out-of-contract
amount¥760

Fair value¥(5)

Balance at the
beginning ofcurrent period

2023

Balance at theend ofcurrent period

Averageinterest rate

Payment term

65,0580.471%—¥ 77,830¥ 65,511

3,885

4,440

72,844

1.796%———

Long-term debt (excluding current portion)

267,614316,555

0.510%

2024–2034

Other interest-bearing liabilities
Long-term guarantee deposits from agents

2,393

2,536

0.407%—¥450,195¥479,368——

Balance at theend ofcurrent period

Averageinterest rate

Payment term

72,8440.465%—

Lease obligations (excluding current portion)
Total

25,62625,265—2024–2038

Millions of yen
Millions of yen

2022

Method of hedge accounting

Principle method

Type of derivative

Interest rate andcurrency swap

Principal hedge item

Long-term loans

Contract
amount¥1,444

Over 1 year
out-of-contract
amount¥722

Fair value¥(78)

Thousands of U.S. dollars (Note 1)

2023

Method of hedge accounting

Principle method

Type of derivative

Interest rate andcurrency swap

Principal hedge item

Long-term loans

Contract
amountOver 1 year
out-of-contract
amountFair value$5,692$5,692$(37)

Short-term debt

Current portion of long-term debt

Current portion of lease obligations

Long-term debt (excluding current portion)

Lease obligations (excluding current portion)

Other interest-bearing liabilities
Long-term guarantee deposits from agents
Total

Balance at the
beginning ofcurrent period2022¥ 49,536¥ 77,830

4,865

3,885

84,450294,2900.782%———

267,6140.488%

2023–2034

2,255

2,393

0.413%—¥462,594¥450,195——

27,19425,626—2023–2038

Thousands of U.S. dollars (Note 1)

Short-term debt

Current portion of long-term debt

Current portion of lease obligations

Long-term debt (excluding current portion)

Lease obligations (excluding current portion)

Other interest-bearing liabilities
Long-term guarantee deposits from agents
Total

Balance at the
beginning ofcurrent period

2023

Balance at theend ofcurrent period

Averageinterest rate

Payment term

487,2230.471%—$ 582,867$ 490,609

29,09833,253545,532

1.796%—

2,004,152

2,370,672

0.510%

17,92518,9930.407%$3,371,491$3,589,968—

191,914

189,215———2024–2034

2024–2038——

Average interest rate is the weighted average interest rate on the balance of borrowings, etc. at the end of the fiscal year.
Average interest rate for lease obligations is not stated because lease obligations are recorded on the consolidated balance sheetsat the amount before deducting the amount equivalent to interest included in the total lease payments.

NIPRO Annual
Annual Report
NIPRO
Report 2023
2023

Contents

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section66

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated
Consolidated Statementsof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
The aggregate annual maturities of long-term debt outstanding at March 31, 2023 wereas follows:
Millions of yen

Thousands of
U.S. dollars (Note 1)2023¥ 65,058$ 487,223

2025

57,7232023

78,9252024

179,908

2026 and thereafter¥381,614

Total

2023

591,066

432,292

1,347,322$2,857,889

As is customary in Japan, long-term and short-term bank loans are made under general agreements which provide that additional
securities and guarantees for present and future indebtedness will be given under certain circumstances at the request of the bank.
In addition, the agreements provide that the bank has the right to offset cash deposits against any long-term and short-termbank loan that becomes due, and in case of default and certain other specified events, against all other loans payable to the bank.

2023

Millions of yen

2022

Thousands of
U.S. dollars (Note 1)

374,4470.674% unsecured bonds due 2028

10,00010,00074,8890.014%–0.025% unsecured bonds due from 2024 to2027 (*1)

5,700

7,900

42,687¥108,910¥111,170$815,621

Total

3,000

30,21010,000¥30,27010,000Interest cost

Benefit payments

50,000¥Service cost

226,241

50,0000.44% unsecured bonds due 2029(a) The reconciliation of beginning and ending balances of the benefit obligation(excluding the defined benefit plans applied based on the simplified method) is
as follows:

Actuarial gains and losses$ 22,466

1.6% unsecured bonds with subordinated specials
due 2055(1) Defined Benefit Plans

2023

3,000

0.25% unsecured bonds due 2025

The Company and certain consolidated subsidiaries have defined benefit pension plans andunfunded retirement benefit plans, and defined contribution pension plan for employees.
Certain consolidated subsidiaries have recorded liabilities for retirement benefit and assets
for a retirement benefit based on the simplified method.

Obligation at April 1

Corporate bonds comprised the following:

0% convertible bonds due 2026

9. Accrued Pension and Severance Liabilities

74,889(*1) This is the total amount of the bonds Goodman Co., Ltd. issued.
In March 2020, the Company issued ¥3,000 million (US$22,466 thousand) of 0.25% unsecured bonds due 2025.
In October 2018, the Company issued ¥10,000 million (US$74,889 thousand) of 0.674% unsecured bonds due 2028.
In October 2019, the Company issued ¥10,000 million (US$74,889 thousand) of 0.44% unsecured bonds due 2029.
In September 2020, the Company issued ¥50,000 million (US$374,447 thousand) of 1.6% unsecured bonds due 2025.
In September 2021, the Company issued ¥30,270 million (US$226,690 thousand) of 0% convertible bonds due 2026.
From February 2017 to February 2022, Goodman Co., Ltd. issued ¥7,900 million (US$59,162 thousand) of 0.014% and 0.120%
unsecured bonds due from 2024 to 2027.

Prior service cost

Other (foreign currency translation adjustments, etc.)

Obligation at March 31

2023

Millions of yen

2022¥18,633¥17,684

176

85

1,608

1,539

Thousands of
U.S. dollars (Note 1)

2023$139,547

12,046
1,321(1,700)(270)(12,735)

(735)

(887)

(5,507)¥17,731¥18,633$132,792

(467)
216

(64)

546

(3,500)1,619(b) The reconciliation of beginning and ending balances of the fair value of the plan
assets (excluding the defined benefit plans applied based on the simplified method)
is as follows:
2023

Millions of yen

2022

Thousands of
U.S. dollars (Note 1)

2023¥12,726¥11,950$95,307

Actuarial gains and losses

(624)

(107)

(4,676)

Benefit payments

(482)

(609)

(3,615)¥12,592¥12,726$94,305

Fair value of plan assets at April 1
Expected return on plan assets

Company contribution

Other (foreign currency translation adjustments, etc.)

Fair value of plan assets at March 31

205

734
33

186

835

471

1,538

5,499
250

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
Section67
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated
Consolidated Statementsof IncomeFinancial/Data Section

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts(c) The reconciliation of beginning and ending balances of liabilities for retirement
benefit calculated by the simplified method is as follows:
2023

Liabilities for retirement benefit at April 1

Millions of yen

(1)

(1)

—

(76)

—

2

(11)

20

Decrease due to charge in measurement of retirement
benefit obligations from the simplified method tothe principle method

1¥24

Liabilities for retirement benefit at March 31

$152

¥108

Retirement payments

Other (foreign currency translation adjustments, etc.)

2023

¥20
2

Retirement benefit cost2022

Thousands of
U.S. dollars (Note 1)

¥ 20

22

(8)

$186

(d) The reconciliation of ending balance of the benefit obligation and the fair value of theplan assets, and liabilities and assets for retirement benefit are as follows:

Benefit obligation on funded scheme

Plan assets

2023¥ 14,872(12,592)
2,279

Net liabilities in the consolidated balance sheet

5,164

¥

5,164

2023

$111,380

3,328

17,074(12,726)
2,599

5,164

Net liabilities in the consolidated balance sheet2022¥ 16,054

2,884

Benefit obligations on unfunded scheme

Net defined benefit liability

Millions of yen

Thousands of
U.S. dollars (Note 1)

5,927
¥

5,927

5,927

(94,305)
21,59838,67338,673$ 38,673(*) Including the defined benefit plans applied based on the simplified method

2023

2022

Thousands of
U.S. dollars (Note 1)

2023¥1,608¥1,539$12,046

Expected return on plan assets

(205)

(186)

(1,538)

Amortization of prior service cost

(168)

(221)

(1,262)

35

43

262

Service cost

Interest cost

Amortization of actuarial gains and losses
Retirement benefit cost calculated by the simplified method
Other
Total

176

(2)
2

¥1,44685(37)
1¥1,224

1,321

(22)
22

$10,829

2023

Millions of yen

Prior service cost

¥ 467

Total

¥1,373

Actuarial gains and losses

906

2022

Thousands of
U.S. dollars (Note 1)

2023

¥64

$ 3,500¥81$10,286176,786(g) Remeasurements of defined benefit plans (Accumulated Other Comprehensive Income)The breakdown of the items recorded in adjustments to defined benefit plans is as follows:
2023

Millions of yen

Unrecognized prior service cost

¥

Total

¥1,899Unrecognized actuarial loss

452

1,446

Bonds

Equities

Short-term funds

2022

Thousands of
U.S. dollars (Note 1)

2023

¥ 84

$ 3,391¥542$14,222457(h) Items concerning plan assets
1. The breakdown of plan assets
Plan assets as of March 31, 2023 and 2022 consist of the following:

10,830

2023

2022

19

17

31%
6

44%
—

General account

21

32

Total

100%

100%

Others(e) The breakdown of net pension and severance costs is as follows:
Millions of yen(f) Remeasurements of defined benefit plans (Other Comprehensive Income)The breakdown of the items recorded in adjustments to defined benefit plans is as follows:(*) Including defined benefit plans applied based on the simplified method

23

7

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

Management
Message

About NIPRO

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionFinancial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated
Consolidated Statementsof IncomeFinancial/Data Section

68Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
2. Method of determining the expected rate of return on plan assets
The long-term expected rate of return is determined considering the current and future
allocation of plan assets, and the current and expected long-term rate of return from thediverse assets composing the plan assets.
(i) Basis of actuarial calculation
The assumptions used in actuarial calculations for the years ended March 31, 2023 and 2022
are as follows:
2023

2022

Discount rate

Primarily 0.6%

Primarily 0.6%

Expected rate of salary increase

Primarily 6.6%

Primarily 6.7%

Primarily 1.5%

Expected long-term rate of returnPrimarily 1.5%

(2) Defined Contribution Retirement Plans

The amounts of necessary contributions to defined contribution retirement plans within the
Company and consolidated subsidiaries were ¥795 million (US$5,953 thousand) and ¥715
million for the years ended March 2023 and 2022, respectively.

10. Commitments and Contingent Liabilities

The Company and its consolidated subsidiaries had the following commitments and contingent
liabilities:

Export drafts discounted

Notes receivable endorsed
Total

2023
¥—
—

¥—

Millions of yen

2022
¥4
—

¥4

Thousands of
U.S. dollars (Note 1)

2023
$—
—

$—

11. Net Assets
The significant provisions in the Corporate Law of Japan (the “Corporate Law”) that influencefinancial and accounting matters are summarized below:(a) Dividends

Under the Corporate Law, companies can pay dividends at any time during the fiscal year in
addition to the year-end dividend upon a resolution at the shareholders’ meeting. For
companies that meet certain criteria such as (1) having a board of directors, (2) having
independent auditors, (3) having a board of corporate auditors, and (4) the service period of
the directors is prescribed as one year rather than the normal term of two years by its articles
of incorporation, the board of directors may declare dividends (except for dividends in kind)
if the company has prescribed so in its articles of incorporation. The Company’s present
system meets the first three criteria but the two-year service period of the directors does notmeet the fourth criterion.
Interim dividends may also be paid once a year by the resolution of the board of directors
if the articles of incorporation of the company stipulate so. The Company’s articles ofincorporation contain such a stipulation, and it pays interim dividends semi-annually by the
resolution of the board of directors.
The Corporate Law provides certain limitations on the amounts available for dividends or
the purchase of treasury stock.
(b) Increases / Decreases and Transfer of Common Stock, Reserve and Surplus
The Corporate Law requires that an amount equal to 10% of dividends must be appropriatedas a legal reserve (a component of retained earnings) or as additional paid-in capital (acomponent of capital surplus) depending on the equity account charged upon the payment ofsuch dividends until the total of aggregate amount of the legal reserve and additional paid-in
capital equals 25% of the common stock.
Under the Corporate Law, the total amount of additional paid-in capital and legal reserve
may be reversed without limitation.
The Corporate Law also provides that common stock, legal reserve, additional paid-in
capital, other capital surplus and retained earnings can be transferred among the accounts
under certain conditions by the resolution of the shareholders’ meeting.
The Company’s legal reserve, which is included in retained earnings, amounted to ¥6,256
million (US$46,853 thousand) as of March 31, 2023, and its additional paid-in capital,
which is included in capital surplus, amounted to ¥635 million (US$4,757 thousand) as ofMarch 31, 2023.

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
ReportingManagement
Foundation

Financial/Data
SectionFinancial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

69
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
12. Business Combination

13. Segment Information

Transaction under common control

1. Outline of Reportable Operating Segments(1) Outline of the business combination

1) Company name and business line at the time of the business combination
Name of the company: Nipro Corporation
Business line: Manufacturing and marketing of medical equipment, pharmaceuticals,
pharmaceutical packaging.

Name of the company: Nipro Holding Americas, Inc.
Business line: Supervision of new investments and fund management of U.S. subsidiaries, etc.

2) Date of the business combination
January 1, 2022
3) Legal form of the business combination
In-kind investment of our subsidiary shares to Nipro Holding Americas,Inc.

Distribution in kind of our subsidiary shares under NIPRO MEDICAL CORPORATION to Nipro
Holding Americas,Inc.

4) Outline and purpose of the transaction
We made an in-kind contribution of shares of our consolidated subsidiary to Nipro Holding
Americas,Inc. for the purpose of business development in line with local conditions, prompt
decision making, and strengthening of management control.
The target company is NIPRO MEDICAL CORPORATION.

(2) Implemented accounting treatment

This merger was processed as a transaction under common control, based on the “AccountingStandard for Business Combinations” (ASBJ Statement No. 21, January 16, 2019) and the“Guidance on Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures” (ASBJ Guidance No. 10, January 16, 2019).

In accordance with ASBJ Statement No.17 “The Revised Accounting Standard for Disclosuresof Segments of an Enterprise and Related Information”, the reportable operating segments
are components of an entity for which separate financial information is available and suchinformation is evaluated regularly by the board of directors in deciding how to allocate
management resources and in assessing performance.
The Company currently operates its business on a stand-alone basis with the divisionalorganization and evaluates the performance of sales and manufacturing of each division
regardless of their products. Accordingly, the Company has three reportable operating
business segments according to the divisions (Medical-Related business, PharmaceuticalRelated business and Pharma Packaging business), which are divided mainly by their products.
*Medical-Related
The domestic division sells injection and infusion products, artificial organ products, highly
functional products, dialysis products, diabetic products and pharmaceuticals such as
generic and kit products. In the Global business division, the head office plays the central
role, placing overseas sales and manufacturing bases for medical equipment and sales
injection and infusion products, artificial organ products, and diabetic products.
*Pharmaceutical-Related
The pharmaceutical division sells pharmaceutical products with containers for combination
products(injectable kit products) consigned by other pharmaceutical companies. Domestic
subsidiaries sell and manufacture injectable drugs, oral drugs and combination products.
*PharmaPackaging
The PharmaPackaging division sells glass for vials and ampoules for medical use, glass forthermos bottles, glass for lighting and containers for combination products (injectable kit
products). Overseas subsidiaries manufacture and sell tube glass and glass mainly forsyringes, vials and ampoules for medical use.

NIPRONIPRO Annual
Annual Report
Report 2023
2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
Section70
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated
Consolidated Statementsof IncomeFinancial/Data Section

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
Business segment information for the years ended March 31, 2023 and 2022 was as follows:

Millions of yen

2023

Reportable segment

Other
(*1)

Medical-Related

Pharmaceutical-Related

PharmaPackaging

Total

Outside¥419,957¥ 72,734¥51,754¥544,446¥

Total¥426,069¥ 95,227¥57,716¥579,013¥

Net sales:Intersegment

Operating income (loss)

Identifiable assets
Other items

6,111

22,492¥ 38,599¥

618,581

5,962

34,566

5,615¥ 2,739¥ 46,954

221,633

97,150¥937,366

Total

Adjustment(*2)

Consolidated
financial statements

752¥ 545,199¥—¥ 545,199

4,444¥ 583,458¥ (38,259)¥ 545,199

3,692
257

201,699

38,259¥(38,259)

47,211¥ (29,482)

1,139,065(111,666)—¥

17,729

1,027,399

Depreciation and amortization

22,466

13,366

5,476

41,310339

41,6494,626

46,275

Increase in tangible and intangible fixed assets

49,09923,461

15,68688,247365

88,613

14,020102,633

Amortization of goodwill

2,292

21

154

2,468

—

2,468

—

2,468

Thousands of U.S. dollars (Note 1)

2023

Reportable segment

Other
(*1)

Medical-Related

Pharmaceutical-Related

PharmaPackaging

Total

Outside$3,145,045$ 544,708$387,583$4,077,338

$

Total

$3,190,817$ 713,152$432,236$4,336,206$

Net sales:Intersegment
Operating income (loss)

Identifiable assets

Other items

45,771$ 289,066
4,632,526

168,443$

44,653258,868

42,057$ 20,513$ 351,636

1,659,806

727,558

7,019,891

$

Total

Adjustment(*2)

Consolidated
financial statements

5,631$4,082,970$—$4,082,970

33,284$4,369,490$(286,520)$4,082,970

27,652

286,520(286,520)

—

1,929

$ 353,566$(220,791)$ 132,775

1,510,519

8,530,410(836,263)

7,694,147

Depreciation and amortization

168,253

100,100

41,014309,3692,543

311,91234,644

346,557

Increase in tangible and intangible fixed assets

367,703

175,703

117,475

660,8822,739

663,621104,998

768,620

Amortization of goodwill

17,168163

1,157

18,489—18,489—18,489NIPRO Annual
Annual Report
NIPRO
Report 2023
2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Management
Foundation

Social Bond
Reporting

Financial/Data
Section71
Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated
Consolidated Statementsof IncomeFinancial/Data Section

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
Millions of yen

2022

Reportable segment

Other
(*1)

Medical-Related

Pharmaceutical-Related

PharmaPackaging

Total

Outside¥373,481¥ 74,386¥46,361¥494,230¥

Total¥379,849¥ 94,975¥52,492¥527,317¥

541,948

203,745

83,255

828,949

Net sales:Intersegment

Operating income (loss)
Identifiable assets
Other items

6,367¥ 39,241

20,588

¥

9,826

6,130

¥ 2,889

33,087¥ 51,956¥

Total

Adjustment(*2)

Consolidated
financial statements

559¥494,789¥—¥494,789

2,655¥529,972¥(35,183)¥494,789

158,355

987,304(56,983)

930,321

2,095

101

35,183¥ 52,058(35,183)¥(28,175)—¥ 23,882

Depreciation and amortization

20,117

13,397

4,822

38,337299

38,636

4,676

43,313

Increase in tangible and intangible fixed assets

56,822

23,362

9,319

89,504281

89,786

7,006

96,793

Amortization of goodwill

2,554

31

266

2,851

—

2,851

—

2,851

(*1) “Other” is the business segment which is not included in a reportable segment and consists of real estate income and sales by headquarters.
(*2) Adjustment is as follows:• Adjustments for operating income ended March 31, 2023 and 2022 include ¥(681) million (US$(5,100) thousand) and ¥(2,173)million of adjustment for unrealized gain and ¥(28,801) million (US$(215,689) thousand) and ¥(26,002) million of corporate cost, respectively.
Corporate cost consists primarily of sales, general and administrative expenses and research and development costs which do not belong to a reportable segment.
• Adjustments for Identifiable assets ended March 31, 2023 and 2022 include ¥(206,729) million (US$(1,548,184) thousand) and ¥(157,649) million of elimination of inter-segment transactions and ¥95,063 million (US$711,922 thousand) and ¥100,666 million of corporate
assets, respectively. Corporate assets consisted primarily of cash and deposits, investment securities, assets for development and assets for the management division of head office which do not belong to a reportable segment.
• Adjustments for depreciation and amortization ended March 31, 2023 and 2022 are for corporate assets. Depreciation and amortization and increase in tangible and intangible fixed assets include long-term prepaid expenses.
• Adjustment for increase in tangible and intangible fixed assets is increase in corporate assets.

Contents

NIPRO
NIPRO Annual
Annual Report
Report 2023
2023

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Financial/Data
SectionManagement
Foundation

Social Bond
Reporting

72

Financial Review
Ten-Year Summary
Consolidated Balance SheetsC
onsolidated Statements
Consolidatedof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
Loss on impairment of fixed assets and Unamortized balance of goodwill by reportablesegments were as follows:

Net sales and Property, plant and equipment by geographical areas were as follows:
Millions of yen

Millions of yen

Loss on impairment of
fixed assets

Unamortized balance of
goodwill

MedicalRelated

¥

2023

Reportable segment

PharmaceuticalRelated

768

¥—

12,70810

PharmaPackaging

¥

Other

Adjustment

768

¥—

¥—

14,514

—

—

Total

—

¥

1,795

Total

¥

768

Loss on impairment of
fixed assets

Unamortized balance of
goodwill

MedicalRelated

PharmaceuticalRelated$ 5,756$—

95,17282$

Property, plant andequipment—
13,444

Other

Adjustment

5,756

$—

$—

108,699

—

—

Total

$

Total

¥98,089¥68,294¥88,636¥545,199

275,739

29,74439,42187,644

432,550

Japan

Americas2023

Europe

Asia

Total

$2,173,129$734,590$511,454$663,796$4,082,970

2,065,002

222,757

295,228

656,3623,239,350

Millions of yen

5,756
108,699

Asia¥290,177

Total$

EuropeThousands of U.S. dollars (Note 1)

Net sales

2023

PharmaPackaging

Property, plant andequipment

2023

Americas14,514

Thousands of U.S. dollars (Note 1)
Reportable segment

Net salesJapan

Net sales

Property, plant andequipment

Japan

Americas2022

Europe

Asia

Total

¥280,094¥78,242¥60,376¥76,075¥494,789

250,123

22,29429,29476,039377,752

Millions of yen

Loss on impairment of
fixed assets

Unamortized balance of
goodwill

2022

Reportable segment

MedicalRelated

PharmaceuticalRelated¥ 1,335¥—

13,22332

PharmaPackaging

¥

Total

Other

Adjustment

Total

—

¥ 1,335¥1,178¥—¥ 2,5141,804

15,060——15,06014. Selling, General and Administrative Expenses

Significant components of selling, general and administrative expenses for the years ended
March 31, 2023 and 2022 were as follows:

Salaries

2023

Millions of yen¥25,9512022¥20,396

Thousands of
U.S. dollars (Note 1)

2023$194,351

NIPRO Annual
Annual Report
NIPRO
Report 2023
2023

Contents

About NIPROManagement
Message

Review ofOperations

Outline of theMedium-Term
Management Plan

Social Bond
Reporting

Financial/Data
SectionManagement
Foundation

73

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated
Consolidated Statementsof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
15. Research and Development Expenses

Research and development expenses for the years ended March 31, 2023 and 2022 were¥19,669 million (US$147,300 thousand) and ¥18,734 million, respectively.

16. Impairment Loss
For the years ended March 31, 2023 and 2022, the Company and its consolidated subsidiaries
recorded impairment loss of ¥768 million (US$5,752 thousand) and ¥2,514 million, respectively.
The following table presents the major impaired assets.

Purpose of use

Location

NexMed International Co., Ltd.

Tools and fixtures—

Nipro Digital Technologies
Europe N.V.

Goodwill

Business use

Next OrthoSurgical Inc.

Millions of yen

Thousands of
U.S. dollars (Note 1)

AmountAmount2023¥225$1,687¥356$2,672¥186

Patent rights

2023$1,398The assets for business use are divided into groups on which separate financial information is reported for management accounting
purposes, whereas leased assets and idle assets are categorized individually. Headquarters assets, R&D facilities, dormitories, andcompany-offered houses are categorized into assets for common use, since these assets cannot generate identifiable cash flows.
The company recognized the impairment loss, since the economic performance of above-mentioned assets will be worse thanwhat the company originally expected.
The recoverable amount of an asset group is measured by its net selling price or its value in use. In the case that the recoverable
amount is net realizable value, it shall be based on appraisal value. Whether the recoverable amount is the value in use, it is calculatedby discounting future cash flow by approximately 5%.
Millions of yen
Purpose of use

Location

Business use

Nipro Medical Corporation—

Nipro ES Pharma Co., Ltd.

Business use

Nissho Insurance & Travel Services Ltd.

(1) Revenue from contracts with customers
Sales by product

Medical devices

Medical productsType of asset

Business use

17. Revenue Recognition Breakdown

Type of asset

2022

AmountIntangible assets¥ 491

Goodwill¥ 623

Buildings and lands

Pharmaceutical Packaging
Products
OthersOthersSales to external customers

Millions of yen
Reportable segments

MedicalRelated¥312,205

PharmaceuticalRelated

PharmaPackaging

Others(*1)

Subtotal—¥ 3,401¥315,607

62—

47,70035—¥419,957¥72,734

107,654

—

¥

2023

72,734——¥315,607

47,763—47,763

225

260

312

573

¥51,754¥544,446¥752¥545,199

Others
(*1)

Total

426

—

¥

Total

180,815——439

180,815

439

Thousands of U.S. dollars (Note 1)
Reportable segments

MedicalRelated

Subtotal$ 25,474$2,363,566

471—

357,226

262—

Sales to external customers $3,145,045$544,708

Medical products

Pharmaceutical Packaging
Products
OthersOthers806,218—$

PharmaPackaging—

Medical devices$2,338,092

PharmaceuticalRelated

2023

544,708—¥1,178—$2,363,566

357,698—357,698

1,689

1,952

2,342

4,295

$387,583$4,077,338$5,631$4,082,970

Others
(*1)

Total

3,192

—

1,354,120

—

$

—

3,289

1,354,120

3,289

Millions of yen

Medical devices

Medical products

Pharmaceutical Packaging
Products
OthersOthersSales to external customers

Reportable segments

MedicalRelated¥278,092

PharmaceuticalRelated

PharmaPackaging

Subtotal—¥ 3,065¥281,158

29—

42,73943—¥373,481¥74,386

95,316—¥

2022

74,386——¥281,158

42,769—42,769

117

160

113

274

¥46,361¥494,230¥559¥494,789

438—

170,141

—

¥

—

445

170,141445

Contents

NIPRO Annual
NIPRO
Annual Report
Report 2023
2023

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Social Bond
ReportingManagement
Foundation

Financial/Data
Section74

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
C
Consolidated
onsolidated Statementsof IncomeFinancial/Data Section

Consolidated
Consolidated Statements of Comprehensive Income
Consolidated
Consolidated Statements of Changes in Net Assets
Consolidated
Consolidated Statements of Cash Flows
Notes
Notes to Consolidated Financial Statements
Corporate Information

N ote s to Cons o l i d a ted F i na nc i a l S ta te m e n ts
Sales by region

Reportable segments

MedicalRelatedJapan¥210,788

Europe47,718Americas
Asia

OthersSales to external customers(2) Foundational information to understand revenue from contracts with customers

Foundational information to understand revenue from contracts with customers is describedin “2. Summary of Significant Accounting Policies (o) Revenue Recognition.

Millions of yen

PharmaceuticalRelated

86,014

Others(*1)

Total¥289,427¥311¥289,738

110

20,46568,294—

68,294

—

—

439

—

¥419,957

Subtotal¥11,860

5,846—

PharmaPackaging¥66,778—

75,437

2023¥72,734

12,07598,0897,352¥51,754

88,635¥544,446

0
0

¥752

98,08988,636439¥545,199

MedicalRelatedJapan$1,578,583

Europe357,358

Americas644,155

PharmaceuticalRelated

Total$2,169,839

828

153,267

511,454—

511,454$544,708—

90,432734,588

55,060—$387,583

663,789—$4,077,338

1

6

3,289

$5,631

734,590

Accounts Receivable

663,796

Customer Advances

3,289$4,082,970

MedicalRelatedJapan¥198,985

Europe43,046

Americas
Asia

OthersSales to external customers

PharmaceuticalRelated

69,14362,305—¥373,481(*1) Other income refers to income from rentals, etc.

2022

PharmaPackaging

Subtotal

Others(*1)

Total¥11,482¥279,535¥113¥279,649

316

17,01460,376—60,376

—

—

—

4,977

¥74,386

9,073

8,791

¥46,361

Ending Balance(March 31, 2023)

Beginning Balance(April 1, 2021)¥160,271—¥140,521

—

2,115

—

426

284

2022

3,074

578

263

Ending Balance(March 31, 2022)¥140,285

—

2,115

284

Contract Liabilities

Deferred Revenues

Beginning Balance(April 1, 2022)

2023

Ending Balance(March 31, 2023)$1,050,592$1,200,267

15,841

3,193

—

2,131

—

4,329

(*1) Contract liabilities consist mainly of customer advances for medical supplies and equipments overseas. They also include
unearned income for maintenance service contracts.

The Group does not have any significant outstanding performance obligations which exceed
one year. Most contracts are within one year.

¥69,06725¥140,285

Millions of yen(4) Unfulfilled performance obligation

Millions of yen
Reportable segments

Customer Advances

Beginning Balance(April 1, 2022)

2023

Thousands of U.S. dollars (Note 1)$2,334

Sales to external customers $3,145,045—

Subtotal

Others(*1)$2,167,505

43,780

OthersPharmaPackaging$ 88,822

564,947

Asia

Contract Liabilities

2023$500,099—

Accounts Receivable

Deferred Revenues

Thousands of U.S. dollars (Note 1)
Reportable segments(3) Outstanding balance of Accounts Receivable and Contract Liabilities

78,242

76,075¥494,230

—
0

445

¥559

78,242
76,075

18. Supplemental Disclosures of Cash Flow Information

Supplemental information related to the Consolidated Statements of Cash Flows was as follows:

445¥494,789

Cash paid during the year for:
Interest

Income tax

2023

Millions of yen¥4,251
9,568

2022¥3,981
6,088

Thousands of
U.S. dollars (Note 1)

2023$31,840
71,659NIPRO Annual Report 2023

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Social Bond
Reporting

Financial/Data
SectionManagement
Foundation

75

Financial Review
Ten-Year Summary
Consolidated Balance Sheets
Consolidated Statementsof IncomeFinancial/Data Section

Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Corporate Information

Co r porate Infor ma tion
(As of March 31, 2023)

Principal Shareholders

Date of Establishment
July 8, 1954
Head Office
3-9-3 Honjo-nishi, Kita-ku, Osaka 531-8510, Japan
Telephone: +81-6-6372-2331
https://www.nipro.co.jp/en/* The office is the registered location of the head office, and theactual business is conducted as follows.

	3-26, Senriokashinmachi, Settsu,
Osaka 566-8510, Japan
Telephone: +81-6-6310-6910

The Master Trust Bank of Japan, Ltd. (Trust Account)
Nippon Electric Glass Co., Ltd.
Custody Bank of Japan, Ltd. (Trust Account)
JP Morgan Chase Bank 385632
Resona Bank Limited
NIPRO CORPORATION Employee Stock
Ownership Association
Kazumi Sano
STATE STREET BANK WEST CLIENT-TREATY 505234
STATE STREET BANK WEST CLIENT-TREATY 505223
SSBTC CLIENT OMNIBUS ACCOUNT
Total

Stock Price Range (Tokyo Stock Exchange)
Number of
Shares Held(in thousands)

Percentage ofTotal Sharesin Issue (%)

21,631
17,135
9,827
4,554
3,129

13.21
10.47
6.00
2.78
1.91

2,610

1.59

1,910
1,758
1,036
979
64,573

1.17
1.07
0.63
0.60
39.45

(Yen)

1,800
1,600
1,400
1,200
1,000
800
12

2021

3

6

9

12

2022

3

6

9

12

2023

Major Group Companies (As of March 31, 2023)

Tokyo Office
4-3-4 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan
Telephone: +81-3-5684-5611
Number of Employees
Parent company

4,390

Consolidated subsidiaries

34,380Total

38,770Common Stock
Authorized................................................ 400,000,000 shares
Issued....................................................... 171,459,479 shares
Outstanding............................................. 163,696,478 shares
Number of Shareholders................................................76,286

Stock Listings
Tokyo Stock Exchange, Prime Market
Ticker Code: 8086
Transfer Agent
Mizuho Trust & Banking Co., Ltd., Head Office
Stock Transfer Agency Dept.
	1-3-3, Marunouchi , Chiyoda-ku,
Tokyo 100-8241, Japan

Area
Domestic

CountryJapan

Overseas

Thailand
China

VietnamSingapore
India

BangladeshIndonesia
UAE
BrazilU.S.A.

CanadaBelgium

FranceGermany
Switzerland
RussiaCroatia

Name
Nipro Medical Industries Co., Ltd.
Goodman Co., Ltd.
NexMed International Co., Ltd.
Nipro Pharma Corporation
Zensei Pharmaceutical Industries Co., Ltd.
Cell Science & Technology Institute, Inc.
Nipro Sales (Thailand) Co., Ltd.
Nipro (Thailand) Corporation Limited
Nipro (China) Holdings Co.,Ltd
Nipro Trading (Shanghai) Co., Ltd
Nipro (Shanghai) Co., LTD.
Nipro Medical (Hefei) Co., Ltd.
Nipro PharmaPackaging (Shanghai) Co, Ltd
Nipro PharmaPackaging (Anyang) Co. Ltd.
Chengdu Pingyuan Nipro Pharmaceutical Packaging Co., Ltd.
Nipro Vietnam Company LIMITED
Nipro Pharma Vietnam Co., Ltd
Nipro Asia Pte Ltd.
Nipro Medical (India) Pvt. Ltd.
Nipro India Corporation Private Limited
Nipro PharmaPackaging India Private Limited
Nipro JMI Co., Ltd.
Nipro JMI Pharma Ltd.
PT. Nipro Indonesia JAYA
Nipro Middle East FZE
Nipro Medical Ltda.
Nipro Holding Americas, Inc
Nipro Medical Corporation
Infraredex, Inc.
Nipro PharmaPackaging Americas Corporation
Nipro Canada Corporation
Nipro Europe Group Companies N.V.
Nipro Medical Europe N.V.
Nipro PharmaPackaging International N.V.
Nipro PharmaPackaging France S.A.S.
Nipro PharmaPackaging Germany GmbHNIPRO PHARMA GLASS AG
Nipro PharmaPackaging Ural LLC
Nipro PharmaPackaging Croatia LLC

Principal business
Manufacturing and marketing of medical devices
Manufacturing and marketing of medical devices
Development, manufacturing and marketing of orthopedic products
Manufacturing and marketing of pharmaceuticals
Manufacturing and marketing of pharmaceuticals
Development and manufacturing of cell culture media
Marketing of medical devices
Manufacturing and marketing of medical devices
General management of the subsidiaryMarketing of medical devices
Manufacturing and marketing of medical devices
Manufacturing and marketing of medical devices
Marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products
Manufacturing of medical devices
Manufacturing and marketing of pharmaceuticals
Marketing of medical devices
Marketing of medical devices
Manufacturing of medical devices
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of medical devices
Manufacturing and marketing of pharmaceuticals
Manufacturing and marketing of medical devices
Marketing of medical devices
Manufacturing of medical devices
General management of the subsidiaryMarketing of medical devices
Manufacturing and marketing of medical devices
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of medical devices
General management of the subsidiaryMarketing of medical devices
General management of the subsidiary
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products
General management of the subsidiary
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products3