Summary Report on Financial Results for Fiscal Year Ended March 2009

May 15, 2009
Listing: JASDAQ
Company name: Fukuda Denshi Co., Ltd.
Code No.:6960(http://www.fukuda.co.jp)
Representative: Kotaro Fukuda, President & CEO
Inquiries:

Shuichi Fukuda, Executive Director and Senior Manager of Accounting & Finance
DepartmentTel:+81-3-3815-2121 (main)

Scheduled date for the ordinary general meeting of shareholders:June 26, 2009

Scheduled date for commencement of dividend payment:

June 29, 2009

Scheduled date for filing the securities report:

June 26, 2009

(Amounts less than one million yen are discarded)
1.

Consolidated financial results for fiscal 2008 (April 1, 2008 through March 31, 2009)(1) Consolidated operating results

Year ended
March 2009
Year ended
March 2008

Year ended
March 2009
Year ended
March 2008

(percentages represent increases or decreases from the previous year)

Net sales
millionyen%

Operating income
million%yen

Ordinary income
million%yen

Net income
millionyen

89,551

1.1

6,719

25.1

6,711

18.1

3,770

18.8

88,568

0.3

5,370

(9.6)

5,684

(9.8)

3,174

(5.3)

Net income per
share

Fully diluted
net income per
share

yen

yen

%

Ratio of net
income toshareholders’equity%Ratio ofordinary
income to total
assets%Ratio ofoperatingincome to net
sales%

195.88

-

5.1

6.7

7.5

164.98

-

4.3

5.6

6.1

(Reference) Profit or loss on equity method investments:
Year ended March 2009: - million yen
Year ended March 2008: - million yen-1-(2) Consolidated financial situation

million yen

million yen

Shareholders’ equity
ratio%

101,200

74,79573.9

3,885.41

99,58573,83374.1

3,835.32

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

million yen

million yen

million yen

Cash and cash
equivalents at theend of the year
million yen

14,663(6,478)(2,342)

27,634

5,855(7,006)(1,117)

21,958

Total assets
Year ended
March 2009
Year ended
March 2008

Net assets

Net assets per shareyen(Reference) Shareholders’ equity:Year ended March 2009: 74,786 million yen
Year ended March 2008: 73,821 million yen(3) Consolidated cash flows

Year ended
March 2009
Year ended
March 2008
2. Dividends

Record date

End ofthe first
quarter
yen

Year
ended
March 2008
Year
ended
March 2009
Year
endingMarch
2010(estimate)

Dividends per share
End of
End of the
End ofthesecondthethirdquarterterm
quarteryen

AnnualTotal
dividends(for the year)

Payout ratio(consolidated)

Ratio ofdividends to
net assets(consolidated)yenmillion yen

%

%

-

40.00

-

40.00

80.00

1,539

48.5

2.1

-

40.00

-

40.00

80.00

1,539

40.8

2.1

-

40.00

-

40.00

80.00

49.7

3. Forecast of consolidated financial results for fiscal 2009 (April 1, 2009 through March 31, 2010)(percentages represent increases or decreases from the previous year for the full-year figures, and fromthe second quarter of the previous year for the consolidated second quarter figures.)millionyen%

millionyen%

millionyen%

millionyen%Netincomeper shareyen

42,200

(1.4)

2,800

(9.7)

2,800

(11.6)

1,200(27.6)

62.34

89,500

(0.1)

6,000

(10.7)

6,000(10.6)

2,800(25.7)

145.47

Net sales

Consolidated
second quarter
Full-year

Operating income

Ordinary income

Net income

-2-

4.

Others(1) Change in significant subsidiaries during the year under review: None

(2) Changes in accounting principles and procedures, and presentation related to the preparation of
consolidated financial statements (described in changes in basis of preparation for the consolidated
financial statements):(i) Changes owing to adoption of revised accounting standards or such like: Yes(ii) Changes other than (i) above: Yes
Note: For more details, please see “Basic significant matters regarding the preparation of
consolidated financial statements” on page 24 and “Changes in basic significant mattersregarding the preparation of consolidated financial statements” on page 31.

(3) Number of outstanding issues (common stock)(i) Number of outstanding shares at the year-end (including treasury stock)
Year ended March 2009: 19,588,000 sharesYear ended March 2008: 19,588,000 shares(ii) Number of shares of treasury stock at the year-end:
Year ended March 2009: 339,945 sharesYear ended March 2008: 340,139 shares
Note: For details of the number of shares, the basis of calculation of net income per share(consolidated), please refer to “Per share information” on page 40.

(Reference) Overview of non-consolidated financial results1.

Non-consolidated financial results for fiscal 2008 (April 1, 2008 through March 31, 2009)(1) Non-consolidated operating results(percentages represent increases or decreases from the previous year)

Year ended
March 2009
Year ended
March 2008

Net sales
millionyen%

Operating income
million%yen

Ordinary income
million%yen

Net income
million%yen

56,440

0.6

3,397

65.5

4,932

34.7

2,996

11.8

56,100

3.8

2,053

70.4

3,661

46.1

2,679

145.8

Net income per
share
yen
Year ended
March 2009
Year ended
March 2008

Fully diluted net
income per shareyen

155.68-139.27

-

-3-

(2)

Non-consolidated financial situation

million yen

million yen

Shareholders’ equity
ratio%

83,36858,76470.5

3,053.02

80,12958,35072.8

3,031.52

Total assets
Year ended
March 2009
Year ended
March 2008

Net assets

Net assets per shareyen(Reference) Shareholders’ equity:Year ended March 2009: 58,764 million yen
Year ended March 2008: 58,350 million yen

2.

Forecast of non-consolidated financial results for fiscal 2009 (April 1, 2009 through March 31, 2010)
The Company omitted the description of the forecast of non-consolidated financial results based on

its conclusion that such non-consolidated information is not important as investment information.

*Explanation about appropriate use of the forecasts of financial results, and other noteworthy matters
The forecasted financial results and other future projections in this material are based on information
available at present, and entail potential risks and uncertainties.
Accordingly, readers should be aware that actual results may differ from the forecast figures dependingon the future business environment.
With respect to the assumption for the forecast of financial results and points to note in using suchforecast, please refer to page 4 of the appendix.

-4-

1.

Operating results(1) Analysis of operation results(i) Overview of performance for the consolidated fiscal year under review
Year ended March
2008

Year ended March2009

AmountAmountNet sales (million
yen)
Operating income(million yen)
Ordinary income(million yen)Net
income(million yen)
Net income pershare (yen)Comparison with the previous year
Rate of change(%)

Change88,56889,551

983

1.1

5,370

6,719

1,349

25.1

5,684

6,711

1,026

18.1

3,174

3,770

595

18.8

164.98

195.88

30.90

18.7

There was a worldwide recession during the fiscal year under review. Corporate earnings continued
to lag due to soaring prices of oil and raw materials and sharp fluctuations in foreign exchange rates in thefirst half of the fiscal year under review, while the financial crisis stemming from the United States
became more serious and affected the real economy in the latter half of the fiscal year.
In the medical equipment industry, medical system reforms continued to be pushed forward to curtail
medical treatment expenses. Such reforms included the expansion of prospective payment of
hospitalization expenses, called diagnosis procedure combination (DPC), at medical institutions. In
addition a further division of functions between hospitals and clinics and an expansion of the fields ofhome medical treatment have been seen.
Under such economic circumstances, the Group posted consolidated net sales of 89,551 million yen(up 1.1% year-on-year) for the fiscal year under review.
Operating income amounted to 6,719 million yen (up 25.1% year-on-year) due to reviews ofpurchase costs and exchange gains from the stronger yen when importing products (pacemakers andventilators).
Ordinary income was 6,711 million yen (up 18.1% year-on-year), and net income totaled 3,770
million yen (up 18.8% year-on-year) despite losses from valuation of investment securities.

(ii) Overview of performance for the consolidated fiscal year under review by segment
Business segment

Physiologicaldiagnostic equipment
Patient
monitoring
equipment

Year ended March 2008

Year ended March 2009

Amount(millionyen)

Amount(millionyen)

Ratio (%)

Ratio (%)

Comparison with theprevious year
ChangeRate of(millionchangeyen)(%)

23,90727.0

24,486

27.4

579

2.4

7,301

8.2

6,189

6.9

(1,112)(15.2)-5-

Medicaltreatment
equipment
Other products andaccessories
Total

35,08339.6

36,560

40.8

1,477

4.2

22,27425.2

22,314

24.9

40

0.2

88,568100.0

89,551

100.0

983

1.1

(1) In the Physiological Diagnostic Equipment segment, sales of electrocardiographs and blood cellcounters increased, while those of respiratory function testing equipment and fundus cameras
continued to grow, supported by the increased awareness about adult diseases and mandatory specifichealth checkups. However, overseas sales declined.
Accordingly, consolidated net sales reached 24,486 million yen (up 2.4% year-on-year).

(2) In the Patient Monitoring Equipment segment, sales fell both in Japan and overseas. As a result,consolidated net sales were 6,189 million yen (down 15.2% year-on-year).

(3) In the Medical Treatment Equipment segment, sales of the business of renting medical equipment forhome treatment (including oxygen-concentrator devices, equipment used to treat sleep apnea
syndrome and homecare ventilators) and Automated External Defibrillators (AEDs) continued toincrease. Sales of ventilators also expanded and accelerated due to the new types of influenza breakout in the supplementary budget for fiscal 2008. The sales volume of pacemakers increased, though
their sales value decreased, affected by the official reimbursement prices.
As a result, consolidated net sales amounted to 36,560 million yen (up 4.2% year-on-year).

(4) In the Other products and accessories segment, we mainly handle recording paper, disposable
electrodes and accessories, as well as consumables used for devices handled by the other segments.
Sales for this segment were 22,314 million yen (up 0.2% year-on-year).

(iii) Outlook for fiscal 2009

Net sales (million
yen)
Operating income(million yen)
Ordinary income(million yen)Net
income(million yen)
Net income pershare (yen)Year ending
March 2009

Year ending
March 2010

AmountAmountComparison with the previous year
Rate of change(%)

Change89,55189,500

(51)

(0.1)

6,719

6,000

(719)

(10.7)

6,711

6,000

(711)

(10.6)

3,770

2,800

(970)

(25.7)

195.88145.47(50.41)(25.7)

The worldwide economic recession resulting from the financial crisis is expected to hit Japan as well,in the forms of falls in production and exports, deterioration of corporate earnings, declines in consumer-6-spending and rapid fluctuations in foreign exchange rates. Thus, the economic situation will likely remainstagnant in the foreseeable future.
In the medical equipment industry, the business environment is likely to remain sluggish, as there areconcerns about the consolidation or the reduction of the number of public hospitals and patients’refraining from visiting hospitals for medical advice because of the recession.
In consideration of such circumstances, the Group expects consolidated net sales of 89,500 million
yen, operating income of 6,000 million yen, ordinary income of 6,000 million yen, and net income of
2,800 million yen for fiscal 2009.

(2) Analysis of financial situation(i) Assets, liabilities and net assets
Total assets increased 1,614 million yen from the end of the previous fiscal year to 101,200
million yen. This was mainly attributed to a rise in cash and deposits despite falls in sales ofMerchandise and products and investment securities.
Total liabilities grew 651 million yen from the end of the previous fiscal year to 26,404 million
yen, owing mostly to a rise in accrued income taxes despite a decrease in short-term borrowings.
Total net assets advanced 962 million yen from the end of the previous fiscal year to 74,795
million yen, due primarily to an increase in retained earnings despite a fall in net unrealized gains inother securities.

(ii) Consolidated cash flows

Cash flows from operating
activities (million yen)
Cash flows from investing
activities (million yen)
Cash flows from financing
activities (million yen)
Effect of exchange rate changes(million yen)
Increase (decrease) in cash andcash equivalents (million yen)
Cash and cash equivalents at theend of the fiscal years (million
yen)Year ended March
2008

Year ended March
2009

5,855

14,663

8,808(7,006)(6,478)527(1,117)(2,342)(1,224)

(7)

(166)

(159)

(2,276)

5,676

7,952

21,98527,634

5,676

ChangeCash flows from operating activities
In the consolidated fiscal year under review, net cash provided by operating activities was 14,663
million yen, up 8,808 million yen from the previous year. Included are net income before taxes of 6,277
million yen, depreciation costs of 5,397 million yen and income taxes paid of 1,504 million yen.
Cash flows from investing activities
Net cash used in investing activities was 6,478 million yen, down 527 million yen from the previous-7-year.
Payments for the acquisition of tangible fixed assets amounted to 5,520 million yen and securities
and investment securities were 1,302 million yen.

Cash flows from financing activities
Net cash used in financing activities was 2,342 million yen, up 1,224 million yen, mainly because of
the payment of dividends of 1,540 million yen.
As a result, the outstanding balance of cash and cash equivalents was 27,634 million yen at the end of
the fiscal year, up 5,676 million yen compared to the end of the previous fiscal year.

(Reference) Trends in cash flow indicators

Shareholders’equity ratio (%)
Marketvalue-based
shareholders’equity ratio (%)
Years needed to
repay debts
Interest
coverage ratio

Year
ended
March 2005

Year
ended
March 2006

Year
ended
March 2007

Year
ended
March 2008

Year
ended
March 2009

72.7

70.1

71.9

74.1

73.9

87.4

77.8

76.8

47.2

36.4

0.6

0.5

0.4

0.6

0.2

117.6

173.2

124.3

69.1

275.5

Note: Shareholders’ equity ratio = Shareholders’ equity ÷ Total assets
Market value-based shareholders’ equity ratio = Market capitalization ÷ Total assets
Years needed to repay debts = Interest-bearing debts ÷ Operating cash flows
Interest coverage ratio = Operating cash flows ÷ Interest payments*Each indicator is calculated using consolidated financial data.
*Market capitalization is calculated by multiplying stock closing prices at the end of the fiscal year by the
number of outstanding shares (excluding treasury shares) at the end of the fiscal year.
Interest-bearing debts represent total debts recorded in the consolidated balance sheets on which interestis paid.
For interest payments, data on interest expenses in the consolidated cash flow statement are used.

(3) Basic policies for profit distribution, and dividends for fiscal 2008 and 2009
The Company regards the returning of profits to shareholders as one of its key managerial measures,and makes it a basic policy to continuously provide shareholders with stable returns, by improving andreinforcing its corporate structure and expanding competitive businesses while securing the necessaryinternal reserves.
The Company has set the minimum trading unit at 100 shares, aiming to have its shares spreadfurther among investors and to have its shares more widely circulated on the market.
We will continue to provide an environment where investors can easily invest in our stock, and-8-

implement and work out measures for enhancing the liquidity of our shares on the market.

(4) Business risks(i) High dependence on certain business partners with which continuation of transactions is unsure
The Company imports and sells ventilators, pacemakers, defibrillators, heart catheters andother devices and equipment. We strive to ensure we can stably continue making transactions
while taking sufficient care to avoid excessive reliance on such transactions.
(ii) Legal regulations
In Japan, the Company is subject to regulations under the Pharmaceutical Affairs Law,
which require us to establish a department that takes care of the safety of the equipment after
sales and appoint a safety manager, as well as compiling manuals for investigation operations
conducted after sales.
The Company has established a department specializing in the central management ofsafety-related information, through which we will further strengthen our safety management
systems so that customers can use our equipment without anxiety.
In addition, the Company’s domestic sales activities are governed by the Fair Competition
Regulations according to the Law for the Prevention of Unreasonable Premiums andMisrepresentation Concerning Products and Services.
Furthermore, the Company owns customer information and confidential sales-related data in
relation to the implementation of its businesses. The Company carefully handles that information
to ensure that it is well protected. To this end, we are striving to step up the surveillance of
in-house networks while limiting access to such information.
(iii) Time required to commercialize new products and technologies
The manufacture and sales of medical equipment are subject to regulations prescribed in the
Pharmaceutical Affairs Law. Consequently, there are cases where a certain period of time isrequired before approval is granted by the relevant independent administrative corporation.
In addition, some medical equipment requires clinical trials, and significant time is needed
to bring it to market.
(iv) Effect of medical administration
The government is proceeding to improve the quality of medical care and curtail medical
treatment expenses. Hence, the medical equipment industry must adapt to changes in theoperating environment brought about by major shifts in the policies of medical authorities.
Moreover, once nearly every two years, the government implements official revisions
affecting treatment payments, pharmaceutical prices, and the official prices of specific medical
materials covered by insurance. Such revisions may lead to intensified price competition,
causing a reduction in sales prices.
(v) Risks accompanying overseas businesses
The Company not only supplies products to distributors overseas, but also has its own-9-overseas sales, development and production bases. Hence, it is possible that unforeseen changes
to laws and regulations in foreign countries, as well as terrorist acts, natural disasters, or otherincidents could adversely affect the Company’s business performance and financial position.
(vi) Important business relationships between the Company and its executives or shareholders withvoting rights
Basic policy on relations with related parties
Relationship with Atomic Sangyo Co., Ltd.
Fukuda Denshi’s shareholder Atomic Sangyo Co., Ltd. holds 12.93% of the Company’s
voting rights (as of March 31, 2009). Kotaro Fukuda, President and CEO of the Company, andhis close relatives own 100% of the shares in Atomic Sangyo.
Atomic Sangyo produces and sells electrocardiogram recording paper, and also engages inthe business of renting real estate. The Company purchases recording paper and accounting slips
and rents offices from Atomic Sangyo.
Decisions on the prices of recording paper and accounting slips are based on negotiations
and consideration of market prices, and payment terms are the same as those generally adopted
in the marketplace.
Office rental contracts are based on actual transactions in nearby locations.

- 10 -

2.

The Fukuda Denshi GroupThe Company consists of 57 subsidiaries and 1 affiliate; the Fukuda Denshi Group is engaged mainly

in manufacturing, purchasing and sales of medical electronic equipment, and conducts related logistics
and services operations.
The relationship between Group companies and business segments are as follows:- Physiological diagnostic equipment segment
Production, purchase and sales of electrocardiographs; phonocardiographs; polygraphs; ultrasounddiagnostic imaging systems; and other items which convert physical phenomena generated byphysiological functions, such as electric potentials caused by heart action, cardiac sound, pulse waves,blood pressure, respiration, and organic movement, into electric signals which are then measured andrecorded.
Major companies involved
Production: Fukuda Denshi Co., Ltd; Fukuda Denshi Tagajo Co., Ltd.; Fukuda Denshi USA, Inc.; andBeijing Fukuda Denshi Medical Instruments Co., Ltd.
Purchase:

Fukuda Denshi Co., Ltd

Sales:

Fukuda Denshi Co., Ltd; Fukuda Life Tech Co., Ltd.; Fukuda Cardiac Laboratory Co., Ltd.;
Fukuda Denshi Hokkaido and other sales subsidiaries; and Beijing Fukuda Denshi Medical
Instruments Co., Ltd.

- Patient monitoring equipment segment
Production, purchase, and sales of patient monitors that monitor various physiological parameters
over a long period of time. They are used for serious cases after patients’ have undergone operations andfor patients with acute cardiac disease.
Major companies involved
Production: Fukuda Denshi Co., Ltd; Fukuda Denshi Tagajo Co., Ltd.; Fukuda Denshi USA, Inc.; andBeijing Fukuda Denshi Medical Instruments Co., Ltd.
Purchase:

Fukuda Denshi Co., Ltd

Sales:

Fukuda Denshi Co., Ltd; Fukuda Denshi Hokkaido and other sales subsidiaries; and Beijing
Fukuda Denshi Medical Instruments Co., Ltd.

- Medical treatment equipment segment
Production, purchase and sales of defibrillators, which are used to resuscitate patients with cardiac
arrest and which treat abnormal heart rhythm by delivering electric impulses to the heart; pacemakers;
ventilators, which help patients with respiratory insufficiency breathe easier; and other equipment.
Major companies involved
Production: Fukuda Denshi Co., Ltd; Fukuda Denshi Tagajo Co., Ltd.
Purchase:

Fukuda Denshi Co., Ltd- 11 -

Sales:Fukuda Denshi Co., Ltd; Fukuda Life Tech Co., Ltd.; Fukuda Cardiac Laboratory Co., Ltd.;
Fukuda Denshi Hokkaido and other sales subsidiaries- Other products and accessories segment
Production, purchase and sales of recording paper, accessories and parts for medical electronicequipment
Major companies involved
Production: Fukuda Denshi Co., Ltd; Fukuda Denshi Tagajo Co., Ltd.
Purchase:

Fukuda Denshi Co., Ltd

Sales:

Fukuda Denshi Co., Ltd; Fukuda Life Tech Co., Ltd.; Fukuda Cardiac Laboratory Co., Ltd.;
Fukuda Denshi Hokkaido and other sales subsidiaries- 12 -

Diagram of the Group’s business structure

Major customers
Japan

Overseas
Products

Products andmerchandise

Consolidated subsidiaryBeijing Fukuda
Denshi Medical
Instruments Co., Ltd.

*2
Consolidated
subsidiary
Fukuda Cardiac
Laboratory Co., Ltd.

Consolidated
subsidiary
Fukuda Life
Tech Co.,Ltd.

Rental

Products andmerchandise*2.
Consolidated
subsidiary
Fukuda Denshi
Switzerland AG

Repairs

Products andmerchandise

Repairs in Japan
Consolidated subsidiary
Fukuda Electronic
Technology Service

Products andmerchandise

Domestic warehousemanagement andpacking/shipping
Consolidated subsidiaries
Fukuda Logistics
CenterEntrustment of
warehousemanagement andpacking/shipping

Parts

Supply of materials

Products andmerchandise

Products and merchandise

RentalEntrustment ofresearch anddevelopment

Fukuda Denshi
Medical treatment
equipment segment

Outsourcing of processing

Consolidated subsidiary
Fukuda Denshi USA,Inc.

Supply of materials

Outsourcing ofprocessing

Patient monitoring
equipment segment
Supply of materials

Outsourcing ofprocessing

Supply of materials

Outsourcing of processing

Physiological diagnostic
equipment segment
Supply of materials

Products and merchandise

Consolidated subsidiaries
Fukuda Denshi Hokkaido and other sales subsidiaries

Other products andaccessories segment

Supply ofmaterials

Products*1.
Related party
Atomic Sangyo
Co., Ltd.

Consolidated subsidiary
Fukuda Denshi Tagajo Co., Ltd.

Publication, sales, and other processing of medical books

Unconsolidated subsidiaries
ME Times
Miyagi Prefecture Medical Information ResearchCenterNiigata Medical Information Development Center
IVAC
Affiliated company not accounted for by the equity
methodFukuda Pulmo*1.

Products

Non-life insurance
agency operations
Unconsolidated
subsidiaries
Fukushin

Related party Atomic Sangyo Co., Ltd. manufactures recording paper for medical electronic equipment

and supplies it to Fukuda Denshi’s Other products and accessories segment.
*2

Fukuda Cardiac Laboratories, Co., Ltd., a consolidated subsidiary, transferred its business assets to

Fukuda Denshi, Co., Ltd. effective from April 1, 2009.

- 13 -

3.

Management policy(1) Basic policies for corporate management
Since its foundation in 1935, the Company has contributed significantly to the advancement ofpeople’s health through the production and sale of a wide range of medical equipment, centering on
respiratory and circulatory systems such as electrocardiographs, under our corporate philosophy to“Contribute to medical advances by fulfilling our social mission and developing medical equipment.”
Responding to significant changes in the social environment, medical equipment has increasingly
been expected to play roles not only in the conventional diagnostics and treatment of diseases but also inthe maintenance and improvement of health and the enhancement of quality of life (QOL).
Against this backdrop, under the slogan of “safety, reliability and comfort,” the Company will makeevery effort to raise the quality of products to offer to customers, develop products that provide
differentiation from our competitors, and carry out product strategies that meet varying medical needs,
aiming to become a company that is trusted by customers.

(2) Targeted management indices
The Company basically aims for continued growth and securing certain profitability, targeting an
ordinary income margin of 10% or more and a payout ratio of 30% or more in fiscal 2012.

(3) Medium- to long-term management strategies
As its medium-term goal, the Company continuously formulates a three-year medium-term businessplan, under which it examines group-wide issues when necessary, and implements solutions to the issues.
The basic management strategies for the new three-year medium term business plan starting from theyear ending March 2009 are as follows:(i) Policies of the medium-term business planTo establish a further solid management structure based on the customer-first principle,
responding to the progress of an aging society with fewer children and changes in the medical
environment following medical system reforms, in Japan.

(ii)

Business strategies
To proactively make investments while focusing on efficient management;
To promote the expansion of businesses by domain;
To strengthen the corporate structure in order to improve the efficiency of development
processes; andTo increase productivity by pursuing overall optimum solutions from development to production.

(iii) Sales strategies
To capture the acute care market;- 14 -

To enhance operations in the homecare market; andTo expand the maintenance service business.

(iv) Improvement of the management system
To strengthen the corporate governance and compliance structure;
To revitalize the overall organization through personnel training and education for employees;
andTo enhance the group management system.

(v)

Increase of corporate value
To establish a stable earnings structure and return profits to shareholders;
To actively tackle environmental issues; andTo contribute to society through medical equipment.

(4) Issues to be addressed
In Japan, various medical system reforms have been carried out, including: the revision of official
reimbursement prices for medical treatment fees, drug prices and specific medical materials covered byinsurance; an increasing adoption of the comprehensive medical fee payment system, called diagnosis
procedure combination (DPC); and the implementation of a new medical insurance system for elderly
persons aged 75 or over.
Given the above and possible future reforms, we expect our market environment to remain severe.
Against this backdrop, the Company will continue to strive to raise its corporate value, develop productsthat provide differentiation from our rivals, strengthen the maintenance service and supplies sales
businesses to secure profits, make investments for enhancing the sales system, and reduce costs tobecome more price competitive than our rival manufacturers at home and abroad.
Furthermore, the Company will continuously strengthen and maintain its quality control and safety
management systems so that customers can use our products without anxiety, and improve the internal
control system to ensure managerial soundness and transparency.

(5) Other important managerial matters of the Company(i)

Acquisition of treasury stock
The Company may purchase its own shares by resolution of the Board of Directors, inaccordance with the provisions of Article 165, Paragraph 2 of the Company Law. This wasdetermined upon the approval of amendment to the Articles of Incorporation at the Ordinary General
Meeting of Shareholders held in June 2006. However, the Company did not acquire any treasury
stock during the fiscal year under review, except for the purchase of shares less than a trading unit,
comprehensively taking into account the economic situation, trends in the Company’s stock price andits financial conditions.

- 15 -

The Company owns 339,945 shares of treasury stock as of the end of March 2009.

(ii) Important contracts concerning management
There are no applicable matters.

- 16 -

4.

Consolidated financial statements(1) Consolidated balance sheets(Million yen)Previous fiscal year
(as of March 31, 2008)
AssetsCurrent assets
Cash and deposits
Trade notes and accounts receivable
Securities
Inventories
Merchandise and products
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation and impairment
lossesBuildings and structures (net)
Machinery and delivery equipment
Accumulated depreciation and impairment
losses
Machinery and delivery equipment (net)
Tools, instruments and fixtures
Accumulated depreciation and impairment
lossesTools, instruments and fixtures (net)Land
Lease assets
Accumulated depreciation and impairment
lossesLease assets (net)
Construction in progress
Total tangible fixed assets
Intangible fixed assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets- 17 -

Fiscal year under review(as of March 31, 2009)

22,54023,710999
13,386
1,928
1,240
(308)
63,49728,224
23,319
999
8,483
44
1,642
1,956
994
(243)
65,4218,610(4,360)8,736(4,413)

4,250
655
(417)

4,322
649
(388)

238
21,433(13,439)260
23,767(14,316)

7,993
5,997
-

9,451
5,792
176
(28)

17
18,4963,295

147
0
19,975
2,668

*1

7,891
3,351
3,102
(49)
14,29636,08899,585

*1

5,837
3,685
3,628
(16)
13,13435,778101,200

(Million yen)Previous fiscal year
(as of March 31, 2008)
Liabilities
Current liabilities
Trade notes and accounts payable
Short-term borrowings
Lease obligations
Income tax payable, etc.
Allowance for bonuses to employees
Allowance for bonuses to officers
Allowance for losses on restructuring
Other
Total current liabilities
Long-term liabilities
Long-term borrowings
Lease obligations
Allowance for retirement benefits
Allowance for retirement benefits to officers
Negative goodwill
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Evaluation difference on other securities
Foreign currency translation adjustment accountTotal valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets- 18 -

Fiscal year under review(as of March 31, 2009)

12,465
3,500
884
1,666
98
112
2,620
21,347

12,401
2,866
54
1,697
1,739
113
3
2,989
21,865

183
3,097
197
1
925
4,404
25,752

50
156
3,230
192
0
909
4,538
26,404

4,621
9,982
59,473(766)
73,311

4,621
9,982
61,693(766)
75,531

447
63
510
11
73,833
99,585

(595)
(149)
(745)
9
74,795
101,200

(2) Consolidated statements of income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Translation adjustments
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gains on sale of investment securities
Gains on sale of fixed assets
Gains on insurance surrender
Gains on reversal of allowance for losses on
restructuring
Gains on reversal of allowance for doubtful accounts
Total extraordinary gains
Extraordinary losses
Losses on sale of fixed assets
Losses on disposal of fixed assets
Loss on valuation of golf club membership
Impairment losses
Loss on valuation of investment securities
Losses on sale of investment securities
Total extraordinary losses
Net income before taxes
Corporate, inhabitants’ and enterprise taxes
Corporate tax adjustments
Total income taxes
Minority interests in earnings of consolidated
subsidiaries
Net income

Previous fiscal year
(April 1, 2007 to March 31,
2008)
88,568*2
51,26037,308*1 *2
31,937
5,370(Million yen)
Fiscal year under review(April 1, 2008 to March 31,
2009)
89,551*2
50,54939,002*1 *2
32,282
6,719

18
128
1
296
445

23
162
224
410

82
48
131
5,684

56
298
63
418
6,711

- 19 -

*3

427
10
285
5

*3

20
749
*4
*5
*6

0
75
31
182
290
6,143
1,482
1,483
2,966
1
3,174

7
614
68
691

*4
*5
*6

16
133
2
14
959
1,125
6,277
2,566
(61)
2,505
1
3,770

(3) Statements of changes in shareholders’ equity(Million yen)Previous fiscal year
(April 1, 2007 to March 31,
2008)
Shareholders’ equity
Common stock
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Total changes during the fiscal year
Balance at the end of the fiscal year
Capital surplus
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Disposal of treasury stock
Total changes during the fiscal
year
Balance at the end of the fiscal
year
Retained earnings
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Dividends paid
Bounties and welfare funds for
employee
Net income
Total changes during the fiscal year
Balance at the end of the fiscal year
Treasury stock
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Acquisition of treasury stock
Disposal of treasury stock
Total changes during the fiscal year
Balance at the end of the fiscal year
Total shareholders’ equity
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Dividends paid
Bounties and welfare funds for
employee
Net income
Acquisition of treasury stock
Disposal of treasury stock
Total changes during the fiscal year
Balance at the end of the fiscal year
Valuation and translation adjustments
Evaluation difference on other securities
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Changes in items other thanshareholders’ equity during the
fiscal year (net)Total changes during the fiscal year
Balance at the end of the fiscal year
Foreign currency translation adjustment
account
Balance at the end of the previous fiscal- 20 -

Fiscal year under review(April 1, 2008 to March 31,
2009)

4,621

4,621

4,621

4,621

9,851

9,982

131

(0)

131

(0)

9,982

9,982

57,84359,473(1,536)(1,539)

(8)

(10)

3,174
1,629
59,4733,770
2,220
61,693

(932)

(766)

(2)
168
165
(766)

(0)
1
0
(766)

71,38373,311(1,536)(1,539)

(8)

(10)

3,174
(2)
300
1,927
73,311

3,770
(0)
1
2,220
75,531

3,197

447(2,750)(1,042)(2,750)447(1,042)
(595)

(11)

63

(Million yen)Previous fiscal year
(April 1, 2007 to March 31,
2008)
year
Changes during the fiscal year
Changes in items other thanshareholders’ equity during the
fiscal year (net)Total changes during the fiscal year
Balance at the end of the fiscal year
Total
valuationandtranslation
adjustments
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Changes in items other thanshareholders’ equity during the
fiscal year (net)Total changes during the fiscal year
Balance at the end of the fiscal year
Minority interests
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Changes in items other thanshareholders’ equity during the fiscal
year (net)Total changes during the fiscal year
Balance at the end of the fiscal year
Total net assets
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Dividends paid
Bounties and welfare funds for
employee
Net income
Acquisition of treasury stock
Disposal of treasury stock
Changes in items other thanshareholders’ equity during the fiscal
year (net)Total changes during the fiscal year
Balance at the end of the fiscal year

Fiscal year under review(April 1, 2008 to March 31,
2009)

74

(213)

74
63

(213)
(149)

3,186

510

(2,676)(1,255)(2,676)510(1,255)
(745)

11

11

0

(2)

0
11

(2)
9

74,581

73,833(1,536)(1,539)

(8)

(10)

3,174
(2)
300

3,770
(0)
1

(2,675)(1,258)(748)
73,833962
74,795Note for statements of changes in shareholders’ equity
Bounties and welfare funds for employees were provided by a subsidiary in China in accordance withlocal laws and regulations.

- 21 -

(4) Consolidated statements of cash flows(Million yen)
Fiscal year under review(April 1, 2008 to March 31,
2009)Previous fiscal year
(April 1, 2007 to March 31,
2008)
Cash flows from operating activities
Net income before taxes
Depreciation and amortization
Increase (decrease) in allowance for losses
on restructuring
Impairment losses
Increase (decrease) in allowance for
doubtful accounts
Increase (decrease) in allowance forbonuses to employees
Increase (decrease) in allowance forbonuses to officers
Increase (decrease) in allowance forretirement benefits to employees
Increase (decrease) in allowance forretirement benefits to officers
Interest and dividend income
Interest expenses
Gains on sale of fixed assets
Losses on sale of fixed assets
Losses on disposal of fixed assets
Losses (gains) on sale of investment
securities
Losses (gains) on valuation of investment
securities
Losses (gains) on insurance surrender
Decrease (increase) in accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable
Increase (decrease) in consumption tax
payable, etc.
Other
SubtotalInterest and dividends received
Interest paid
Insurance received
Corporate tax, etc. paid
Net cash provided by operating activities
Cash flows from investing activities
Net decrease (increase) in time deposits
Acquisition of tangible fixed assets
Acquisition of intangible fixed assets
Purchase of securities and investment
securities
Proceeds from sale of securities andinvestment securities
Payments for short-term loans
Payments for insurance reserve
Proceeds from reversal of insurance
reserve
Other
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Purchase of treasury stock
Sale of treasury stock- 22 -

6,143
5,139
(541)

6,277
5,397
(108)

31
(43)

14
(97)

(25)

73

38

14

(64)

133

(1,015)

(5)

(146)
82
(10)
0
75
(245)

(186)
56
(7)
16
133
-

-

959

(285)
453
(281)
(2,609)
(222)

(614)
344
3,122
(544)
158

447
6,920
95
(84)
99
(1,175)
5,855

881
16,019171(53)
30(1,504)
14,663(423)(4,576)(521)(2,713)(8)(5,520)(220)(1,302)

1,428

1,000

(2)
(644)
235

(200)
(1,120)
1,121

212(7,006)(227)(6,478)

-

(700)

200
(83)
(2)
300

(66)
(0)
1

Dividends paid
Repayments of lease obligations
Dividends paid to minority shareholders
Net cash used in financing activities
Effect of exchange rate changes on cash andcash equivalents
Increase or decrease in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the fiscal year
Increase (decrease) in cash and deposits
owing to changes in the scope of
consolidation
Cash and cash equivalents at the end of the
fiscal year

Previous fiscal year
(April 1, 2007 to March 31,
2008)(1,530)(1)(1,117)(7)(Million yen)
Fiscal year under review(April 1, 2008 to March 31,
2009)(1,540)(33)(1)(2,342)(166)(2,276)

5,676

24,297

21,958

(62)

-

*1

- 23 -

21,958*1

27,634

Events or conditions that may cast significant doubt upon the entity's ability to continue as a going
concern
Not applicable

Basic significant matters regarding the preparation of consolidated financial statements

1. Scope
consolidation

2. Application
equity methodofofPrevious fiscal year
(April 1, 2007 to March 31, 2008)(1) Numberofconsolidated
subsidiaries: 52
Major consolidated subsidiaries
are as follows:
Fukuda Life Tech Co., Ltd.
Fukuda Cardiac Laboratory Co.,Ltd.
Fukuda Denshi Hokkaido
Kontron Medical SAS was
excluded from the scope of
consolidation,
becausethecompany was sold to Esaote
France SARL, a subsidiary of theEsaote Group (Italy), on April 30,
2007.
Kontron Medical AG was
renamedFukudaDenshi
Switzerland AG on May 15, 2007.
(2) Names and other details of major
unconsolidated subsidiaries
Of the subsidiaries, ME Times,
Fukushin
and
three
other
companies were not included in
the scope of consolidation,
because their business sizes are
small, and their total assets, net
sales, net income and loss
(amount corresponding to theowned interest), retained earnings(amount corresponding to theowned interest) had no material
effect on the consolidated
financial statements.

Fiscal year under review(April 1, 2008 to March 31, 2009)(1) Numberofconsolidated
subsidiaries: 52
Major consolidated subsidiaries
are as follows:
Fukuda Life Tech Co., Ltd.
Fukuda Cardiac Laboratory Co.,Ltd.
Fukuda Denshi Hokkaido(1) Number of affiliated companies
accounted for by equity method-(1) Number of affiliated companies
accounted for by equity method-- 24 -(2) Names and other details of major
unconsolidated subsidiaries
Same as on the left

3. Accounting period,
etc. of consolidated
subsidiaries

4. Accounting
standards(1) Valuation
standards andmethods
forprinciple assets

Previous fiscal year
(April 1, 2007 to March 31, 2008)(2) Names and other details of
unconsolidated subsidiaries andaffiliates that are not accounted
for by equity methodThe
fiveunconsolidated
subsidiaries and the affiliatecompany Fukuda Pulmo had nomaterial effect on consolidated
income and loss and retained
earnings, and they were notimportant as a whole in terms ofmaterial
influenceontheconsolidated interim financial
statements. Accordingly, we did
not
apply
equitymethodaccounting to them.
The accounts of consolidated
subsidiaries Fukuda Denshi USA,
Inc.;
and
FukudaDenshi
Switzerland
AG
close
on
December 31 of each year. In
the preparation of consolidated
financial statements, consolidated
subsidiaries’ financial statements
as of the said date were used, andwith respect to significant
transactions
thatoccurred
between the said date and theconsolidated
book-closing,adjustments
necessaryforconsolidation were made.

Fiscal year under review(April 1, 2008 to March 31, 2009)(2) Names and other details of
unconsolidated subsidiaries andaffiliates that are not accounted
for by equity method
Same as on the left(i) Securities
Held-to-maturity securities- Amortized cost method
Other securities
Marketable securities- Stated at fair value based on themarket price as of the end of thisfiscal year.
(Unrealized holding gains or losses
are reported in a component of
net assets, while the cost of
securities sold is calculated by themoving average method.)(i) Securities
Held-to-maturity securities
Same as on the left
Other securities
Marketable securities
Same as on the left

- 25 -

Same as on the left

Previous fiscal year
(April 1, 2007 to March 31, 2008)
Non-marketable securities- Stated at cost based on themoving average method.
For investments in theinvestment enterprise limited
Liability association and similar
associations (deemed to be
securities pursuant to Article 2,
Paragraph 2 of the Financial
Instruments and Exchange Law),
the net amount corresponding tothe ownership percentage is used,based on the most recent financial
statements available as of thereporting date and other material
stipulated in the partnershipcontract.
(ii) Inventories

Merchandise and products- Mainly stated at cost determinedby the first-in, first-out method.
Raw materials- Mainly stated at cost determinedby the gross average method.
Work in progress- Mainly stated at cost based on
the specific cost method.
Supplies- Stated based on the last purchaseprice method.

Fiscal year under review(April 1, 2008 to March 31, 2009)
Non-marketable securities
Same as on the left(ii) Inventories
The cost method (the amounts
stated in the balance sheets arecalculated by writing down thebook values based on lower
profitability) is used as avaluation standard.
Merchandise and products-Mainly stated at cost determined by
the first-in, first-out method.
Work in progress-Mainly stated at cost based on thespecific cost method.
Raw materials-Mainly stated at cost based on the
gross average method.
Supplies-Stated at cost based on the lastpurchase price method.
(Changes in accounting policies)
Starting with the fiscal year underreview, the Company applies the“AccountingStandardforMeasurementof
Inventories”(Accounting Standards Board ofJapan (ASBJ) Statement No. 9,
announced on July 5, 2006).
The effect of this change on
consolidated
operatingincome,ordinary income and net income
before taxes for the fiscal year underreview is insignificant.

-- 26 -

(2) Depreciation
method forsignificant
depreciable
assetsPrevious fiscal year
(April 1, 2007 to March 31, 2008)(i) Tangible fixed assets
Depreciated primarily by
the declining balance method.
However, buildings (except forbuilding attachments) acquired on
or after April 1, 1998 weredepreciated using the straight-line
method.
Major useful life:
Buildings
andstructures:
3–60 years
Machineryanddeliveryequipment:
4–12 years
Tools, instruments and fixture:
2–20 years
Assets with an acquisition
cost of 100,000 yen or more but
less than 200,000 yen were
evenlyamortizedoverathree-year period.
Of the tools, instruments
andfixtures,theoxygenconcentrator devices (assets forrental) were depreciated using thestraight-line method with theestimated rental period (fouryears) used as the number ofdepreciation years.
(Changes in accounting policies)
In accordance with the revision of
the Corporate Tax Law, from thisfiscal year, the Company has changed
the depreciation method for tangible
fixed assets acquired on or after April
1, 2007 to the method stipulated in therevised Corporate Tax Law.
This change had little effect on
our consolidated earnings for thisfiscal year.
(Additional information)
In accordance with the revision of
the Corporate Tax Law, as for assets
acquired on or before March 31, 2007
that were fully depreciated to the
maximum allowable amount using thedepreciation method stipulated in the
Corporate Tax Law before its
revision, the Company evenly
depreciated the residual book value up
to the reminder value over five years,
from the next consolidated fiscal year
to the consolidated fiscal year inwhich those assets were depreciatedto the maximum allowable amount.
This practice had little effect on
our consolidated earnings for thisfiscal year.

- 27 -

Fiscal year under review(April 1, 2008 to March 31, 2009)(i) Tangible fixed assets (excluding
lease assets)
Same as on the left--

Previous fiscal year
(April 1, 2007 to March 31, 2008)(ii) Intangible fixed assets
Depreciated by the straight-line
method.
Software for internal use isamortized by the straight-line
method over its useful life of five
years.
As for software for sale in themarket, the Company records thelarger of an amortization based on
projected sales volume for theeffective sales period (no longer
than three years) or a uniform
amortization over the effective
remaining sales period.
(iii)-(3) Basis
provision
allowances

forof(i) Allowance for doubtful accounts
To prepare for losses
incurred by bad debts, theamount of potential loss iscalculated by using the historicalloss ratio in the case of generalloans or receivables. Potential
loss for specific loans or
receivables, for which we haveconcerns
regardingtheircollectability, is calculated byassessing the possibility ofcollection for each individual
account.
(ii) Allowance for bonuses to
employees
To prepare for the paymentof bonuses to employees, anamount corresponding to thisfiscal year’s portion of estimatedbonus payments was reserved.

- 28 -

Fiscal year under review(April 1, 2008 to March 31, 2009)(ii) Intangible fixed assets (excluding
lease assets)
Same as on the left(iii) Lease assets
Lease assets in finance leasetransactions that do not transfer
ownership
The straight-line method is used,based on the assumption that theuseful life is the lease term and theresidual value is zero.
Finance lease transactions that do
not transfer ownership and for which
the inception of the lease predates the
beginning of the initial year of
application of the standard continue tobe accounted for in a similar mannerwith the ordinary rental transactions.
(i) Allowance for doubtful accounts
Same as on the left(ii) Allowance for bonuses
employees
Same as on the leftto

Previous fiscal year
(April 1, 2007 to March 31, 2008)(iii) Allowance for bonuses to
officers
To prepare for the paymentof bonuses to directors andcorporate auditors, an amountcorresponding to this fiscal
year’s portion of estimated bonus
payments was reserved.
(iv) Allowanceforlossesonrestructuring
To prepare for losses on
restructuring, the amount of theestimated losses was reserved.
(v) Allowance for retirement benefits
to employees
To prepare for the payment of
retirement benefits to employees,
the amount recognized as
accruing at the end of this fiscal
year was reserved, based on theestimated
retirement
benefitobligation and pension assets at
the end of this fiscal year.
Prior service costs areamortized, using the straight-line
method over a certain number ofyears (10 years), which are lessthan the average remaining yearsof service of the employees when
they incurred.
Actuarial differences areamortized, using the straight-line
basis over a certain number ofyears (10 years), which are lessthan the average remaining yearsof service of the employees when
they incurred, from the fiscal year
after the one in which they arise.
(vi) Allowance for retirement benefits
to officers
To prepare for the paymentof retirement benefits to directors
and corporate auditors, someconsolidated subsidiaries reserve
the estimated amount to be paid atthe end of the fiscal year, in
accordance with the internal
regulations.

- 29 -

Fiscal year under review(April 1, 2008 to March 31, 2009)(iii) Allowance for bonuses to officers
Same as on the left(iv) Allowanceforlossesrestructuring
Same as on the lefton(v) Allowance for retirement benefits
to employees
Same as on the left(vi) Allowance for retirement benefits
to officers
Same as on the left

(4) Standards
fortranslationofimportantforeigncurrency-based
assetsor
liabilities into
Japanese yen(5) Leasetransactions
accounting
method(6) Other importantmattersforpreparation of
consolidated
financialstatements
5. Valuation of assets
and liabilities of
consolidated
subsidiaries
6. Depreciationofnegative goodwill
7. Cash in consolidated
cash flow statements

Previous fiscal year
(April 1, 2007 to March 31, 2008)
Monetary credits and debts
denominated in foreign currencies aretranslated into yen based on thecurrent exchange rates at the end ofeach fiscal year. Differences arisingfrom such translation are stated as
profits or losses. Assets, liabilities,
revenue and expenses of overseas
subsidiaries, and other financial items
are translated into yen based on thecurrent exchange rates at the end ofeach fiscal year. The resulting
differences are recorded as Foreign
currencytranslation
adjustment
account and Minority interests, under
Net assets.
Finance lease transactions otherthan those in which the ownership ofthe leased property is recognized ashaving transferred to the lessee, arebased on the accounting method forordinary lease transactions.
Accounting treatment of consumption
tax and other taxes
Consumption tax and other taxes
are excluded from profits and losses.

Fiscal year under review(April 1, 2008 to March 31, 2009)Same as on the left-

Accounting treatment of consumption
tax and other taxes
Same as on the left

Assetsandliabilitiesofconsolidated subsidiaries are valued
using the full-fair-value method.

Same as on the left

Negative goodwill is amortizedover a five-year period.
Cash (cash and cash equivalents)
in the consolidated statements of cash
flows consists of cash on hand,readily-available
deposits,
andshort-term investments with amaturity not exceeding three months
at the time of purchase that are readily
convertible to cash and not exposed tosignificant risk in value fluctuations.

Same as on the left

- 30 -

Same as on the left

Changes in basic significant matters regarding the preparation of consolidated financial statements
Previous fiscal year
(April 1, 2007 to March 31, 2008)--

Fiscal year under review(April 1, 2008 to March 31, 2009)(Practical solution on unification of accounting
policies applied to foreign subsidiaries forconsolidated financial statements)
Beginning the fiscal year under review, theCompany applies the “Practical Solution on
Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Financial
Statements” (ASBJ Practical Issues Task Force(PITF) No. 18, May 17, 2006) and made revisions
necessary for consolidated settlement of accounts.
The effect of this change on consolidated
operating income, ordinary income and net income
before taxes for the fiscal year under review isinsignificant.
(Accounting standards for lease transactions)
Finance lease transactions that do not transfer
ownership were traditionally accounted for in amanner similar to accounting treatment forordinary rental transactions. From the fiscal year
under review, however, the Company applies the“Accounting Standard for Lease Transactions”(ASBJ Statement No. 13, (June 17, 1993 (First
Committee of Business Accounting Council),revised March 30, 2007)) and the “Guidance on
Accounting Standard for Lease Transactions”(ASBJ Guidance No. 16 (January 18, 1994
(Accounting System Committee at the JapaneseInstitute of Certified Public Accountants), revised
March 30, 2007)) and accounts for finance leasetransactions in a similar manner with ordinary sales
and purchase transactions.
Finance lease transactions that do not transfer
ownership and of which the inception of the leasepredates the beginning of the initial year of
application of the standard are continued to beaccounted for in a similar manner with the ordinary
rental transactions.
The effect of this change on consolidated
operating income, ordinary income and net income
before taxes for fiscal year under review isinsignificant.

- 31 -

Changes in the presentation
Previous fiscal year
(April 1, 2007 to March 31, 2008)(Consolidated balance sheets)
Allowance for retirement benefits to officers,which was separately reported in the previous
fiscal year, was presented as Other underLong-term liabilities from this fiscal year. Thischange was made because the First Audit
Committee Report No. 42, “Audit Treatment for
Reserves of Special Taxation Measures Law,
Allowances or Reserves of Special Law, andAllowances for Retirement Benefits to Officers,”
was announced on April 13, 2007.
The amount of retirement benefits to officers
included in Other for this fiscal year was 854
million yen.
(Consolidated statements of cash flows)
Increase (decrease) in allowance for losses on
restructuring, which was included in Losses on
restructuring in the previous fiscal year, wasseparately presented from this fiscal year.
In the previous fiscal year, Increase (decrease) inallowance for losses on restructuring was minus
2,126 million yen.

Fiscal year under review(April 1, 2008 to March 31, 2009)--(Consolidated balance sheets)
Since the “Cabinet Office Ordinance Partially
Revising Regulations for Terminology, Forms andPreparation of Financial Statements” (August 7,
2008, Cabinet Office Ordinance No. 50) became
applicable, Inventories recognized for the previous
fiscal year are presented as a separate item as
Merchandise and products, Work in Progress and
Raw Materials and Supplies from the fiscal year
under review. The Merchandise and products,
Work in Progress and Raw Materials and Supplies
included in Inventories for the previous fiscal year
were 10,655 million yen, 84 million yen and 2,646
million yen, respectively.

- 32 -

Notes(Consolidated balance sheets)
Previous fiscal year
(as of March 31, 2008)*1. Notes to unconsolidated subsidiaries andaffiliated companies
Unconsolidated subsidiaries and affiliatedcompanies:
Investment securities:
48 million yen(Stocks)
2.Discount on bills:
448 million yen(Discount on export bills)

Fiscal year under review(as of March 31, 2009)*1. Notes to unconsolidated subsidiaries andaffiliated companies
Unconsolidated subsidiaries and affiliatedcompanies:
Investment securities:
48 million yen(Stocks)
2.Discount on bills:
397 million yen(Discount on export bills)(Consolidated statements of income)Previous fiscal year
(April 1, 2007 to March 31, 2008)*1. Major items and amounts of Selling, generaland administrative expenses are as follows:
Salaries, benefits, and other monies to officers
and employees:
11,103 million yen
Bonuses and provision of allowance forbonuses:
2,677 million yen
Provision of allowance for retirement benefits
to officers:
37 million yen
Retirement benefit expenses: 544 million yen
Depreciation:
1,359 million yen
Provision of allowance for bonuses to officers:
98 million yen

Fiscal year under review(April 1, 2008 to March 31, 2009)*1. Major items and amounts of Selling, generaland administrative expenses are as follows:
Provision of allowance for doubtful accounts:
14 million yen
Salaries, benefits, and other monies to
officers and employees: 11,408 million yen
Bonuses and provision of allowance forbonuses:
2,758 million yen
Provision of allowance for retirement benefits
to officers:
39 million yen
Retirement benefit expenses: 702 million yen
Depreciation:
1,536 million yen
Provision of allowance for bonuses to
officers:
113 million yen*2. Research and development expenses included in
the General and administrative expenses andManufacturing expenses for this fiscal year are
2,093 million yen.
*3 Breakdown of Gains on sale of fixed assets
Machinery and delivery equipment:
0 million yen
Tools, instruments and fixtures: 10 million yen
Total
10 million yen*2. Research and development expenses includedin the General and administrative expenses
and Manufacturing expenses for this fiscal
year are 2,005 million yen.
*3 Breakdown of Gains on sale of fixed assets
Buildings and structures:
0 million yen
Machinery and delivery equipment:
4 million yen
Tools, instruments and fixtures: 2 million yen
Total
7 million yen*4. Breakdown of Losses on sale of fixed assets
Buildings and structures:
3 million yen
Machinery and delivery equipment:
4 million yen
Land:
7 million yen
Intangible fixed assets:
0 million yen
Total
16 million yen*5 Breakdown of Losses on disposal of fixed
assetsBuildings and structures:
14 million yen
Machinery and delivery equipment:
3 million yen
Tools, instruments and fixtures: 9 million yen
Intangible fixed assets:
105 million yen
Total
133 million yen*4. Breakdown of Losses on sale of fixed assets
Machinery and delivery equipment:
0 million yen*5 Breakdown of Losses on disposal of fixed assets
Buildings and structures:
3 million yen
Machinery and delivery equipment:
1 million yen
Tools, instruments and fixtures: 11 million yen
Intangible fixed assets:
60 million yen
Total
75 million yen- 33 -

Previous fiscal year
(April 1, 2007 to March 31, 2008)*6. Impairment losses
The Company groups its operations bybusiness segment, and consolidated subsidiaries
form their grouping with each company oroffice as one unit. Impairment losses onleased real estate and idle assets are recognizedseparately.
Because of a decrease in cash flows caused
by a declined operating income, we havewritten down the book values of the following
assets to recoverable values. These write-offs
have resulted in impairment losses (of 31
million yen), which were booked as
extraordinary losses.
These impairment losses consist of thelosses on tools, instruments and fixtures of 15
million yen; and on other assets of 16 million
yen.
The recoverable value was assessed
according to the net sale value, and the market
prices were evaluated according to roadsideland prices or the assessed value of fixed asset
tax, with reasonable adjustments.
Use of assets
Operational
assetsLocation ofassetsMatsuyama
City, Ehime
Prefecture
and anotherlocation

Type ofassetsTools,
instruments
andfixturesFiscal year under review(April 1, 2008 to March 31, 2009)*6. Impairment losses
The Company groups its operations bybusinesssegment,
andconsolidated
subsidiaries form their grouping with eachcompany or office as one unit. Impairment
losses on leased real estate and idle assets arerecognized separately.
Because of a decrease in cash flows
caused by a declined operating income, wehave written down the book values of thefollowing assets to recoverable values.
These write-offs have resulted in impairment
losses (of 14 million yen), which were booked
as extraordinary losses.
These impairment losses consist of thelosses on tools, instruments and fixtures of 12
million yen; and on other assets of 1 million
yen.
The recoverable value was assessed
according to the net sale value, and the market
prices were evaluated according to roadsideland prices or the assessed value of fixed asset
tax, with reasonable adjustments.

Amount(million yen)

Use of assets
Operational
assets31- 34 -

Location ofassetsMatsuyama
City, Ehime
Prefecture
and anotherlocation

Type ofassetsTools,
instruments
andfixtures

Amount(million yen)
14

(Statements of changes in shareholders’ equity)
Previous fiscal year (from April 1, 2007 to March 31, 2008)
1.

Type and total number of issued shares and type and number of shares of treasury stock
Number of sharesat the end of
previous fiscal
year(1,000 shares)

Increased numberof shares for fiscal
year under review(1,000 shares)

Decreased numberof shares for fiscal
year under review(1,000 shares)

Number of sharesat the end of the
fiscal year underreview(1,000 shares)

19,58819,588--19,58819,588

411

0

72

340

411

0

72

340

Number of issued
sharesCommon stock
Total
Treasury stock
Commonstock(Note)
Total

Note: The increase of 0 shares in treasury stock of common stock reflects the increase owing to therepurchase of shares less than the trading unit.
The decrease of 72,000 shares in treasury stock of common stock reflects the decrease owing to thedisposal.

2.

Stock acquisition rights and treasury stock acquisition rights
Not applicable.

3.

Dividends(1) Dividend payment amount(Resolution)

Ordinary
GeneralMeetingof
Shareholders held on
June 28, 2007
Board of Directors’
meeting held on
November 16, 2007

Type of shares

Total dividend
amount(million yen)

Dividends per
share(in yen)Recorddate

Effective
date

Common stock

767

40

March 31,2007

June 29,
2007

Common stock

769

40

September
30, 2007

December
7, 2007(2) Of the dividends whose record date belongs to the fiscal year under review, and those whose
effective date of the dividends will be in the current fiscal year

(Resolution)

Type ofsharesTotal
dividend
amount(millionyen)

Ordinary
GeneralMeetingof
Shareholders held on
June 26, 2008

Commonstock

769

Source fordividends

Dividends
per share(in yen)Recorddate

Effective
date

Retainedearnings

40

March 31,2008

June 27,2008- 35 -

Fiscal year under review (from April 1, 2008 to March 31, 2009)
1.

Type and total number of issued shares and type and number of shares of treasury stock
Number of sharesat the end of
previous fiscal
year(1,000 shares)

Number of issued
sharesCommon stock
Total
Treasury stock
Commonstock(Note)
Total
Note:

Increase in
number of sharesfor fiscal year
under review(1,000 shares)

Decrease in
number of sharesfor fiscal year
under review(1,000 shares)

Number of sharesat the end of the
fiscal year underreview(1,000 shares)

19,58819,588--19,58819,588

340

0

0

339

340

0

0

339

The increase of 0 in treasury stock of common stock reflects the increase owing to therepurchase of shares less than the trading unit.
The decrease of 0 in treasury stock of common stock reflects the decrease owing to the disposalof shares less than the trading unit.

2.

Stock acquisition rights and treasury stock acquisition rights
Not applicable.

3.

Dividends(1) Dividend payment amount(Resolution)

Ordinary
GeneralMeetingof
Shareholders held on
June 26, 2008
Board of Directors’
meeting held on
October 30, 2008

Type ofsharesTotal
dividend
amount(million yen)

Dividends per
share(in yen)Record date

Effective dateCommon
stock

769

40

March 31,2008

June 27,
2008

Common
stock

769

40

September
30, 2008

December 5,
2008(2) Of the dividends whose record date belongs to the fiscal year under review, and those whose
effective date of the dividends will be in the current fiscal year

(Resolution)

Type ofsharesTotal
dividend
amount(millionyen)

Ordinary
GeneralMeetingof
Shareholders held on
June 26, 2009

Commonstock

769

Source fordividends

Dividends
per share(in yen)Recorddate

Effective
date

Retainedearnings

40

March 31,2009

June 29,2009- 36 -

(Consolidated statements of cash flows)
Previous fiscal year
(April 1, 2007 to March 31, 2008)
1. Relationship between the balance of cash andcash equivalents at the end of the fiscal year andamounts stated in the consolidated balance sheets(as of March 31, 2008)
Cash and deposits:
24,540 million yen
Time deposits with a(581 million yen)deposit period of overthree months:
Cash
and
cash
21,958 million yen
equivalents:

Fiscal year under review(April 1, 2008 to March 31, 2009)
1. Relationship between the balance of cash andcash equivalents at the end of the fiscal year andamounts stated in the consolidated balance sheets(as of March 31, 2009)
Cash and deposits:
28,224 million yen
Time deposits with a(590 million yen)deposit period of overthree months:
Cash
and
cash
27,634 million yen
equivalents:*2

2. Details of important nonfund transactions
The amounts of assets and liabilities in financelease transactions which are newly recognized forthe fiscal year under review are 232 million yen
each.

-

- 37 -

(Lease transactions)Disclosure of lease transactions is omitted, as there is no significant necessity of such disclosure in
the summary report on financial results.

(Securities)
Disclosure of securities is omitted, as there is no significant necessity of such disclosure in thesummary report on financial results.

(Derivative transactions)
Previous fiscal year (from April 1, 2007 to March 31, 2008) and fiscal year under review (from April
1, 2008 to March 31, 2009):
There are no applicable items, as the Group did not use derivative transactions.

(Retirement benefits)
Disclosure of retirement benefits is omitted, as there is no significant necessity of such disclosure in
the summary report on financial results.

(Stock options, etc.)
Previous fiscal year (from April 1, 2007 to March 31, 2008):
Not applicable.

Fiscal year under review (from April 1, 2008 to March 31, 2009):
Not applicable.

(Tax effect accounting)Disclosure of tax effect accounting is omitted, as there is no significant necessity of such disclosurein the summary report on financial results.

(Segment information)a.

Segment information by business typePrevious fiscal year (from April 1, 2007 to March 31, 2008) and fiscal year under review (from
April 1, 2008 to March 31, 2009):
Segment information by business type is omitted because the amounts of sales, operating
income and assets of the medical electronic equipment business account for over 90 percent of
the total sales, total operating income and total assets of all segments.

b.

Segment information by geographical area
Previous fiscal year (from April 1, 2007 to March 31, 2008) and fiscal year under review (from- 38 -

April 1, 2008 to March 31, 2009):
Segment information by geographical area is omitted because the amounts of sales andassets in Japan account for over 90 percent of the total sales and total assets of all segments.

c.

Overseas sales
Previous fiscal year (from April 1, 2007 to March 31, 2008) and fiscal year under review (from
April 1, 2008 to March 31, 2009):
Overseas sales are omitted because such sales accounted for less than 10 percent ofconsolidated sales.

(Transactions with related parties)
Disclosure of transactions with related parties is omitted, as there is no significant necessity of suchdisclosure in the summary report on financial results.

(Business combinations, etc.)
Previous fiscal year (from April 1, 2007 to March 31, 2008):
Not applicable.

Fiscal year under review (from April 1, 2008 to March 31, 2009):
Not applicable.

- 39 -

(Per share information)

Net assets per share
Net income per share
Fully diluted net income per
share

Previous fiscal year
(April 1, 2007 to March 31,
2008)3,835.32 yen
164.98 yen
Not stated, as there is nopotential dilution.

Fiscal year under review(April 1, 2008 to March 31,
2009)3,885.41 yen
195.88 yen
Not stated, as there is nopotential dilution.

Note: The following is the basis for calculation of net income per share:
Item

Previous fiscal year
(April 1, 2007 to March 31,
2008)

Net income per share
Net income (million yen)Amount not belonging toordinary shareholders (million
yen)
Net income in relation tocommon stock (million yen)
Average number of shares
during the fiscal year (1,000
shares)(Significant subsequent events)
Not applicable.

- 40 -

Fiscal year under review(April 1, 2008 to March 31,
2009)

3,174

3,770

-

-

3,174

3,770

19,242

19,247

5.

Non-consolidated financial statements(1) Balance sheets(Million yen)Previous fiscal year
(as of March 31, 2008)

AssetsCurrent assets
Cash and deposits
Trade notes receivable
Accounts receivable
Securities
Merchandise
Products
Merchandise and products
Raw materials
Work in progress
Supplies
Raw materials and supplies
Advance payments
Prepaid expenses
Deferred tax assets
Short-term loans to affiliates
Other accounts receivable
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings
Accumulated depreciation
Buildings (net)
Structures
Accumulated depreciation
Structures (net)
Machinery and equipment
Accumulated depreciation
Machinery and equipment(net)
VehiclesAccumulated depreciation
Vehicles (net)
Tools, instruments and fixtures
Accumulated depreciation
Equipment (net)Land
Lease assets
Accumulated depreciation
Lease assets (net)
Construction in progress
Total tangible fixed assets
Intangible fixes assets
Leasehold rights
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Stocks of affiliates
Investments in capital
Investments in affiliates
Long-term loans to employees
Long-term loans to affiliates- 41 -

Fiscal year under review(as of March 31, 2009)

9,838
89
19,699
999
2,260
1,984
2,154
39
166
149
290
680
4,913
857
130
(1,111)43,144

15,741
53
21,279
999
2,937
12
1,388
50
267
661
4,275
686
266
(980)
47,6385,991(3,047)
2,944
291
(226)
65
117
(62)
55

6,195
(3,064)
3,131
309
(235)
73
77
(47)
29

61
(56)
5
18,568(11,449)
7,118
5,009
17
15,21563(45)
17
20,196(11,951)
8,245
4,814
68
(10)
57
0
16,369

5
3,098
15
3,118

5
2,438
14
2,458

7,843
4,289
1
403
14
1,215

5,789
3,639
1
403
8
1,115

(Million yen)Previous fiscal year
(as of March 31, 2008)
Long-term prepaid expenses
Deferred tax assets
Insurance reserves
Other
Allowance for doubtful accounts
Allowance for valuation of
investments
Total investments and other assets
Total fixed assets
Total assets
Liabilities
Current liabilities
Trade notes payable
Accounts payable
Short-term borrowings
Lease obligations
Other accounts payable
Income tax payable, etc.
Advances received
Deposits received
Allowanceforbonusestoemployees
Allowance for bonuses to officers
Allowance for losses on liquidationof affiliates
Other
Total current liabilities
Long-term liabilities
Lease obligations
Allowance for retirement benefits toemployees
Long-term other accounts payable
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Capital reserves
Other capital surplus
Total capital surplus
Retained earnings
Legal income reserves
Other retained earnings
Reserveforbusiness
expansion
Reserveforadvanceddepreciation of fixed assets
Special reserves
Retained earnings brought
forward
Total retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Evaluation difference on othersecurities
Total valuation and translation
adjustments
Total net assets
Total liabilities and net assets- 42 -

Fiscal year under review(as of March 31, 2009)
44
3,083
2,185
244
(3)

2,864
2,839
243
(4)

(672)

-

18,65036,98480,12916,90135,73083,368

5,002
4,308
3,500
1,539
75
107
4,607
500

1,405
8,220
2,800
14
1,692
829
19
6,771
570

43

45

112

3

71
19,867

243
22,616

-

46

1,056

1,098

854
1,911
21,779841
1,987
24,604

4,621

4,621

8,946
1,036
9,982

8,946
1,036
9,982

1,171

1,171

300

300

49

49

37,50037,500

5,045

6,501

44,066(766)
57,90345,523(766)
59,361

446

(596)

446

(596)

58,35080,12958,764
83,368

(2) Statements of income(Million yen)Previous fiscal year
(April 1, 2007 to March 31,
2008)
Net sales
Sales of products
Sales of merchandise
Other sales
Total net sales
Cost of sales
Product inventories at the beginning of the
fiscal year
Product manufacturing costs
Total
Products transfer to/from other accountFinished product inventories at the end of
the fiscal year
Cost of sales of products
Merchandise inventories at the beginningof the fiscal year
Purchases of merchandise
Total
Merchandise transfer to/from otheraccount
Merchandise inventories at the end of the
fiscal year
Cost of sales of merchandise
Other cost of sales
Total cost of sales
Gross profit
Selling, general and administrative expenses
Advertising expenses
Packing and freight charges
Service and repair expenses
Salaries and benefits
Bonuses
Provision of allowance for bonuses
Retirement benefit expenses
Provision of allowance for bonuses to
officers
Commission expenses
Premiums
Lease expenses
Research and development expenditures
Depreciation
Other
Total selling, general and administrative
expenses
Operating income
Non-operating income
Interest income
Dividend income
Real estate rent
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest income
Foreign exchange losses
Loss on investment in partnership
Other- 43 -

Fiscal year under review(April 1, 2008 to March 31,
2009)

15,451
32,528
8,121
56,10014,42033,904
8,115
56,440

2,201

1,984

12,096
14,297
1,615

10,443
12,428
2,212

1,984

1,336

10,697

8,879

1,535

2,260

28,09329,62841

27,70529,966
116

2,260

1,600

27,327
3,348
41,372
14,72828,248
3,738
40,866
15,574

662
695
465
1,860
258
270
85

627
607
523
1,930
283
330
157

43

45

1,756
773
255
1,940
1,032
2,576
12,675

986
818
241
1,965
1,107
2,552
12,177

2,053

3,397

88
1,234
283
7
105
1,719

106
1,443
293
105
1,949

99
11
0

68
293
51
0

(Million yen)

Total non-operating expenses
Ordinary income
Extraordinary gains
Gains on insurance surrender
Gains on sale of investment securities
Reversal of reserve for valuation of
investments
Reversal of allowance for doubtful
accounts
Reversal of reserve for loss on liquidationof affiliates
Gain on sales of fixed assets
Total extraordinary gains
Extraordinary losses
Losses on disposal of fixed assets
Losses on sale of fixed assets
Loss on valuation of investment securities
Total extraordinary losses
Net income before taxes
Corporate, inhabitants’ and enterprise taxes
Corporate tax adjustments
Total income taxes
Net income

Previous fiscal year
(April 1, 2007 to March 31,
2008)
111
3,661

Fiscal year under review(April 1, 2008 to March 31,
2009)
413
4,932

285
427
38

602
22

34

54

5

68

790

4
752

39
39
4,412
90
1,642
1,732
2,679

118
15
959
1,093
4,591
1,050
544
1,594
2,996

- 44 -

Manufacturing statement
Previous fiscal year
(April 1, 2007 to March 31, 2008)
Item
I. Materials expenses
II. Labor expenses
III. Other expenses
Subcontracted
designing
expensesandtrial
manufacture expenses
OthersTotal manufacturing expenses
Work in progress inventories
at the beginning of the fiscal
year
Transfer from other accounts
Total
Work-in-progress inventories
at the end of the fiscal year
Transfer to other accounts
Product manufacturing costs

Note
No.

Amount(million yen)
8,495
2,415

Ratio
(%)
61.8
17.5

1,387

Fiscal year under review(April 1, 2008 to March 31,
2009)
AmountRatio(million yen)
(%)
7,649
61.6
2,173
17.5
1,394

1,442

2,830
13,741
132

20.7
100.0

1,206

2,600
12,42339*2

46
13,92039

40
12,503
12

*3

1,785
12,0962,047
10,44320.9
100.0(Footnotes)
Previous fiscal year
(April 1, 2007 to March 31, 2008)

1.

Fiscal year under review(April 1, 2008 to March 31, 2009)

Cost calculation method
The Company calculates cost of products by
way of job-order cost system (projection). Cost
variances are allocated to cost of sales, products
and work in progress at the end of the fiscal year.
*2 Breakdown of transfer from other accounts
Current assets and others
43 million yen(Trial manufacture andresearch in progress)
Others3 million yen
Total
46 million yen

1. Cost calculation method
Same as on the left

*3 Breakdown of transfer to other accounts
Research
and1,383 million yen
development expenses
Current assets and others
39 million yen(Trial manufacture andresearch in progress)
Others362 million yen
Total
1,785 million yen*3 Breakdown of transfer to other accounts
Research
and1,488 million yen
development expenses
Current assets and others
97 million yen(Trial manufacture andresearch in progress)
Others
461 million yen
Total
2,047 million yen*2 Breakdown of transfer from other accounts
Current assets and others
40 million yen(Trial manufacture andresearch in progress)
Others0 million yen
Total
40 million yen- 45 -

(3) Statements of changes in shareholders’ equity(Million yen)Previous fiscal year
(April 1, 2007 to March 31,
2008)
Shareholders’ equity
Common stock
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Total changes during the fiscal year
Balance at the end of the fiscal year
Capital surplus
Capital reserve
Balance at the end of the previous
fiscal year
Changes during the fiscal year
Total changes during the fiscal
year
Balance at the end of the fiscal year
Other capital surplus
Balance at the end of the previous
fiscal year
Changes during the fiscal year
Disposal of treasury stock
Total changes during the fiscal
year
Balance at the end of the fiscal year
Total capital surplus
Balance at the end of the previous
fiscal year
Balance at the end of the fiscal year
Disposal of treasury stock
Total changes during the fiscal
year
Balance at the end of the fiscal year
Retained earnings
Legal reserve
Balance at the end of the previous
fiscal year
Changes during the fiscal year
Total changes during the fiscal
year
Balance at the end of the fiscal year
Other retained earnings
Reserve for business expansion
Balance at the end of the previous
fiscal year
Changes during the fiscal year
Total changes during the fiscal
year
Balance at the end of the fiscal
year
Reserve for advanced depreciationof fixed assets
Balance at the end of the previous
fiscal year
Changes during the fiscal year
Total changes during the fiscal
year
Balance at the end of the fiscalyear- 46 -

Fiscal year under review(April 1, 2008 to March 31,
2009)

4,621

4,621

4,621

4,621

8,946

8,946

-

-

8,946

8,946

904

1,036

131

(0)

131

(0)

1,036

1,036

9,851

9,982

131

(0)

131

(0)

9,982

9,982

1,171

1,171

-

-

1,171

1,171

300

300

-

-

300

300

49

49

-

-

49

49

(Million yen)Previous fiscal year
(April 1, 2007 to March 31,
2008)
Special reserves
Balance at the end of the previous
fiscal year
Changes during the fiscal year
Total changes during the fiscal
year
Balance at the end of the fiscal
year
Retained earnings brought forward
Balance at the end of the previous
fiscal year
Changes during the fiscal year
Dividends paid
Net income
Total changes during the fiscal
year
Balance at the end of the fiscal year
Total retained earnings
Balance at the end of the previous
fiscal year
Changes during the fiscal year
Dividends paid
Net income
Total changes during the fiscal
year
Balance at the end of the fiscal year
Treasury stock
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Acquisition of treasury stock
Disposal of treasury stock
Total changes during the fiscal year
Balance at the end of the fiscal year
Total shareholders’ equity
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Dividends paid
Net income
Acquisition of treasury stock
Disposal of treasury stock
Total changes during the fiscal year
Balance at the end of the fiscal year
Valuation and translation adjustments
Evaluation difference on other securities
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Changes in items other thanshareholders’ equity during the
fiscal year (net)Total changes during the fiscal year
Balance at the end of the fiscal year
Total
valuationandtranslation
adjustments
Balance at the end of the previous fiscal
year
Changes during the fiscal year

- 47 -

Fiscal year under review(April 1, 2008 to March 31,
2009)

37,50037,500--37,50037,500

3,902

5,045

(1,536)
2,679(1,539)
2,996

1,142

1,456

5,045

6,501

42,92344,066(1,536)
2,679(1,539)
2,996

1,142

1,456

44,06645,523

(932)

(766)

(2)
168
165
(766)

(0)
1
0
(766)

56,46357,903(1,536)
2,679
(2)
300
1,440
57,903(1,539)
2,996
(0)
1
1,457
59,361

3,197

446(2,750)(1,042)(2,750)446(1,042)
(596)

3,197

446

(Million yen)Previous fiscal year
(April 1, 2007 to March 31,
2008)
Changes in items other thanshareholders’ equity during the
fiscal year (net)Total changes during the fiscal year
Balance at the end of the fiscal year
Total net assets
Balance at the end of the previous fiscal
year
Changes during the fiscal year
Dividends paid
Net income
Acquisition of treasury stock
Disposal of treasury stock
Changes in items other thanshareholders’ equity during the fiscal
year (net)Total changes during the fiscal year
Balance at the end of the fiscal year

- 48 -

Fiscal year under review(April 1, 2008 to March 31,
2009)(2,750)(1,042)(2,750)446(1,042)(596)

59,66058,350(1,536)
2,679
(2)
300

(1,539)
2,996
(0)
1

(2,750)(1,042)(1,310)58,350414
58,764

Events or conditions that may cast significant doubt upon the entity's ability to continue as a going
concern
Not applicable

Significant accounting policies
Item
1. Valuation
standards
methods for securities

2. Valuation
standards
methods for inventories

andPrevious fiscal year (from April
1, 2007 to March 31, 2008)(1) Held-to-maturity bonds- Amortized cost method(2) Shares of subsidiaries andaffiliates- Stated at cost based on themoving average method.
(3) Other securities
Marketable securities- Stated at fair value basedon the market price as of theend of the fiscal year.
(Unrealized holding gains orlosses are reported in acomponent of net assets,with the cost of securities
sold is calculated by themoving average method.)
Non-marketable securities- Stated at cost based on themoving average method.
For investments in theinvestment enterprise limited
Liability association andsimilar associations (deemed
to be securities pursuant to
Article 2, Paragraph 2 of the
Financial Instruments andExchange Law), the net
amount corresponding to theownership percentage isused, based on the mostrecent financial statements
available as of the reporting
date and other materials
stipulated in the partnershipcontract.

andFiscal year under review (from
April 1, 2008 to March 31, 2009)(1) Held-to-maturity bonds
Same as on the left
(2) Shares of subsidiaries andaffiliates
Same as on the left
(3) Other securities
Marketable securities
Same as on the left

Non-marketable securities
Same as on the left

The cost method (theamounts stated in the balance
sheets are calculated by writing
down the book values based onlower profitability) is used as avaluation standard.

- 49 -

Previous fiscal year (from April
1, 2007 to March 31, 2008)
Merchandise and products- Stated at cost determinedby the first-in, first-out
method.
Raw materials- Stated at cost determinedby the gross average method.
Work in progress- Stated at cost based on thespecific cost method.
Supplies- Stated based on the lastpurchase price method.

Item

-

3. Depreciation method for fixed
assets(1) Tangible fixed assets
Depreciated by the decliningbalance method.
However,buildings (except for building
attachments) acquired on or after
April 1, 1998 were depreciatedusing the straight-line method.
Major useful life:
Buildings:
3–50 years
Structures:
10–60 years
Machinery and equipment:
8–12 years
Vehicles and delivery equipment:
4–6 years
Tools, instruments and fixtures:
2–20 years
Assets with an acquisition
cost of 100,000 yen or more but
less than 200,000 yen were
evenlyamortizedoverathree-year period.
Of the tools, instruments andfixtures, the oxygen concentrator
devices (assets for rental) weredepreciated by the straight-line
method with the estimated rental
period (four years) as adepreciation year.

- 50 -

Fiscal year under review (from
April 1, 2008 to March 31, 2009)
Merchandise and products- Mainly stated at cost
determined by the first-in,
first-out method.
Work in progress- Stated at cost based on thespecific cost method.
Raw materials- Stated at cost based on the
gross average method.
Supplies- Stated based on the lastpurchase price method.
(Changes in accounting policies)
Starting with the fiscal year
under review, the Company
appliesthe“AccountingStandard for Measurement of
Inventories”(AccountingStandards Board of Japan(ASBJ) Statement No. 9,
announced on July 5, 2006).
The effect of this change on
consolidated operating income,ordinary income and net income
before taxes for the fiscal year
under review is insignificant.
(1) Tangible
fixed
assets(excluding lease aseets)
Same as on the left

Item

Previous fiscal year (from April
1, 2007 to March 31, 2008)(Changes in accounting policies)
In accordance with therevision of the Corporate Tax
Law, from this fiscal year, theCompany has changed thedepreciation method for tangible
fixed assets acquired on or after
April 1, 2007 to the method
stipulatedintherevisedFinancial
Instruments
andExchange Law.
This change had little effecton earnings for this fiscal year.
(Additional information)
In accordance with therevision of the Corporate Tax
Law, from this fiscal year theCompany has changed thedepreciation method for tangible
fixed assets acquired on or
before March 31, 2007 that are
fully
depreciatedtothemaximum allowable amountusing the depreciation method
stipulated in the pre-revisionCorporate Tax Law. From thisfiscal year, the depreciation
method used by the Company is
the one in which it evenly
depreciates the residual bookvalue up to the reminder value
over five years, from the next
fiscal year of the fiscal year in
which
these
assetsaredepreciated to the maximum
allowable amount.
This practice had little effecton earnings for this fiscal year.
(2) Intangible fixed assets
Depreciatedbythestraight-line method.
Software for internal use isamortized by the straight-line
method over its useful life of five
years.
As for software for sale inthe market, the Company records
the larger of an amortization
based on projected sales volume
for the effective sales period (nolonger than three years) or a
uniform amortization over theeffective remaining sales period.

- 51 -

Fiscal year under review (from
April 1, 2008 to March 31, 2009)--(2) Intangible
fixed
assets(excluding lease assets)
Same as on the left

Item

4. Basisforallowances

provision

Previous fiscal year (from April
1, 2007 to March 31, 2008)(3)-

Fiscal year under review (from
April 1, 2008 to March 31, 2009)(3) Lease assets
Lease assets in finance leasetransactions that do not transfer
ownership
The straight-line method isused, based on the assumptionthat the useful life is the leaseterm and the residual value is
zero.
Finance lease transactions
that do not transfer ownershipand for which the inception of
the lease predates the beginningof the initial year of applicationof the standard continue to beaccounted for in a similarmanner with the ordinary rental
transactions.
of (1) Allowance for doubtful (1) Allowance for doubtful
accounts
accounts
To prepare for losses
Same as on the left
incurred by bad debts, theamount of potential loss iscalculated by using the historicalloss ratio in the case of generalloans or receivables. Potential
losses for specific loans or
receivables, for which we haveconcerns
regardingtheircollectability, are calculated byassessing the possibility ofcollection for each individual
account.
(2) Allowance for valuation of
investments
To prepare for losses oninvestments in subsidiaries andsimilar organizations, we reserve
the necessary amount while
taking into account financial
conditions of subsidiaries andother factors.
(3) Allowance for bonuses to (2) Allowance for bonuses to
employees
employees
To prepare for the payment
Same as on the leftof bonuses to employees, wereserve an amount corresponding
to this fiscal year’s portion of
estimated bonus payments toemployees.

- 52 -

Previous fiscal year (from April
Fiscal year under review (from1, 2007 to March 31, 2008)
April 1, 2008 to March 31, 2009)(4) Allowance for bonuses to (3) Allowance for bonuses to
officers
officers
To prepare for the payment
Same as on the leftof bonuses to directors andcorporate auditors, we reserve anamount corresponding to thisfiscal year’s portion of estimatedbonus payments to directors andcorporate auditors.
(5) Allowance for losses on (4) Allowance for losses on
liquidation of affiliates
liquidation of affiliates
To prepare for losses on
Same as on the left
liquidation of affiliates, theamount of the estimated losses
was reserved.
(6) Allowance for retirement (5) Allowance for retirement
benefits to employees
benefits to employees
To prepare for the payment
Same as on the leftof
retirement
benefits
toemployees,theamountrecognized as accruing at the endof this fiscal year was reserved,
based on estimated retirement
benefit obligation and pension
assets at the end of this fiscal
year.
Actuarial differences areamortized, using the straight-line
basis over a certain number ofyears (10 years), which are lessthan the average remaining yearsof service of the employees when
they incurred, from the fiscal
year after the one in which theyarise.
5. Lease transactions accounting
Finance lease transactions,
methodother than those, in which theownership of the leased property
is recognized as having beentransferred to the lessee, arebased on the accounting method
for ordinary lease transactions.
6. Other important matters for Accounting
treatmentof Accounting
treatmentofpreparationoffinancial consumption tax, etc. and other consumption tax and other taxes,
statements
taxes
etc.
The Consumption tax and other Same as on the left
taxes, etc. are excluded fromprofits and losses.
Item- 53 -

Changes in accounting method
Previous fiscal year
(April 1, 2007 to March 31, 2008)-

Fiscal year under review(April 1, 2008 to March 31, 2009)(Accounting standards for lease transactions)
Finance lease transactions that do not transfer
ownership were traditionally accounted for in amanner similar to accounting treatment forordinary rental transactions. From the fiscal year
under review, however, the Company applies the“Accounting Standard for Lease Transactions”(ASBJ Statement No. 13, (June 17, 1993 (First
Committee of Business Accounting Council),revised March 30, 2007)) and the “Guidance on
Accounting Standard for Lease Transactions”(ASBJ Guidance No. 16 (January 18, 1994
(Accounting System Committee at the JapaneseInstitute of Certified Public Accountants), revised
March 30, 2007)) and accounts for finance leasetransactions in a similar manner with ordinary sales
and purchase transactions.
Finance lease transactions that do not transfer
ownership and of which the inception of the leasepredates the beginning of the initial year of
application of the standard are continued to beaccounted for in a similar manner with the ordinary
rental transactions.
The effect of this change on consolidated
operating income, ordinary income and net income
before taxes for fiscal year under review isinsignificant.

Changes in the presentation
Previous fiscal year
(from April 1, 2007 to March 31, 2008)(Balance sheets)
Allowance for retirement benefits to officers,which was separately reported in the previous
fiscal year, was presented as Long-term otheraccounts payable under Long-term liabilities fromthis fiscal year. We made this change because theFirst Audit Committee Report No. 42, “Audit
Treatment for Reserves of Special Taxation
Measures Law, Allowances or Reserves of Special
Law, and Allowances for Retirement Benefits to
Officers,” was announced on April 13, 2007.
(Statements of income)Investment partnership losses, which was
included in Other under Non-operating expenses in
the previous fiscal year, was separately presented
from this fiscal year as the amount of such losses
exceeded 10/100th of non-operating expenses.
In the previous fiscal year, Investment
partnership losses were 14 million yen.

- 54 -

Fiscal year under review(from April 1, 2008 to March 31, 2009)
-

-

6.

Others(1) Changes of officers(i) Representative Director
Not applicable.

(ii) Other officers- Candidate for Director to be newly appointed
Director: Koji Takahashi (current position is Operating Officer, Deputy General Manager ofSales Head Office and Senior Manager of Cardiovascular Office)- Director to retire
Director: Susumu Segawa (current position is Director and Senior Manager of Purchasing
Department) *Slated to be appointed as Advisor(iii) Scheduled appointment dateJune 26, 2009

- 55 -