Summary Report on Financial Results for Fiscal Year Ended March 2010
May 14, 2010
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 / Senior Manager of Accounting & Finance Department –Senior Manager of Information Technology DepartmentTel:+81-3-3815-2121 (main)
Scheduled date for the ordinary general meeting of shareholders: June 29, 2010
Scheduled date for commencement of dividend payment:
June 30, 2010
Scheduled date for filing the securities report:
June 29, 2010
(Amounts less than one million yen are discarded)
1. Consolidated financial results for year ended March 2010 (April 1, 2009 through March 31, 2010)(1) Consolidated operating results (percentages represent increases or decreases from the previous year)
Net sales
millionyen
Year ended
March 2010
Year ended
March 2009

Year ended
March 2010
Year ended
March 2009%

Operating income
million%yen

Ordinary income
million%yen

Net income
millionyen%

88,147

(1.6)

6,999

4.2

7,006

4.4

3,498

(7.2)

89,551

1.1

6,719

25.1

6,711

18.1

3,770

18.8

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%

186.40

-

4.6

6.9

7.9

195.88

-

5.1

6.7

7.5

(Reference) Profit or loss on equity method investments:
Year ended March 2010: - million yen
Year ended March 2009: - million yen(2) Consolidated financial situation
million yen

million yen

Shareholders’ equity
ratio%

102,909

76,04973.94,117.89

101,200

74,79573.9

3,885.41

Total assets
Year ended
March 2010
Year ended
March 2009

Net assets(Reference) Shareholders’ equity:Year ended March 2010: 76,049 million yen
Year ended March 2009: 74,786 million yen-1-

Net assets per shareyen(3) Consolidated cash flows
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

12,195(7,516)(4,279)28,023

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

27,634

Year ended
March 2010
Year ended
March 2009
2. Dividends
End ofthe first
quarter
yen
Year
ended
March 2009
Year
endingMarch 2010
Year
endingMarch 2011
(estimate)

Dividends per share
End of
End of
the
the
third
term
quarteryen

End of thesecondquarter

AnnualTotal
dividends(for the year)

Ratio ofdividends to
net assets(consolidated)

Payout ratio(consolidated)yenmillion yen

%

%

-

40.00

-

40.00

80.00

1,539

40.8

2.1

-

40.00

-

40.00

80.00

1,477

42.9

2.0

-

40.00

-

40.00

80.00

42.9

3. Forecast of consolidated financial results for fiscal year ending March 2011 (April 1, 2010 throughMarch 31, 2011)(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

Consolidated
second quarter

41,000

(1.4)

2,800

(0.1)

2,800

(3.5)

1,400

25.7

74.59

Full-year

89,500

1.5

7,000

0.0

7,000

(0.1)

3,500

0.0

186.49Net sales

Operating income

Ordinary income

Net income-2-4. Others(1) Change in significant subsidiaries during the year under review: None
New: None
Exclusion: 1 (Fukuda Cardiac Laboratory Co., Ltd)
Note: For details, please refer to 2. The Fukuda Denshi Group on page 10.
(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 26 and “Changes in basic significant mattersregarding the preparation of consolidated financial statements” on page 29.
(3) Number of outstanding issues (common stock)(i) Number of outstanding shares at the year-end (including treasury stock)
Year ended March 2010: 19,588,000 sharesYear ended March 2009: 19,588,000 shares(ii) Number of shares of treasury stock at the year-end:
Year ended March 2010: 1,119,910 sharesYear ended March 2009: 339,945 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 39.

(Reference) Overview of non-consolidated financial results
1. Non-consolidated financial results for fiscal year ended March 2010 (April 1, 2009 through March 31,
2010)(1) Non-consolidated operating results(percentages represent increases or decreases from the previous year)
Net sales
millionyen
Year ended
March 2010
Year ended
March 2009%

Ordinary income
million%yen

Net income
million%yen

54,622

(3.2)

2,780

(18.2)

4,089(17.1)

2,546(15.0)

56,440

0.6

3,397

65.5

4,932

34.7

2,996

11.8

Net income per
share
yen
Year ended
March 2010
Year ended
March 2009

Operating income
million%yen

Fully diluted net
income per shareyen

135.68-155.68--3-

(2) Non-consolidated financial situation

million yen

million yen

Shareholders’ equity
ratio%

84,80959,074

69.7

3,198.72

83,36858,76470.5

3,053.02

Total assets
Year ended
March 2010
Year ended
March 2009

Net assets

Net assets per shareyen(Reference) Shareholders’ equity:Year ended March 2010: 59,074 million yen
Year ended March 2009: 58,764 million yen
2. Forecast of non-consolidated financial results for fiscal year ending March 2011 (April 1, 2010 throughMarch 31, 2011)
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
1. The forecasted financial results described above are based on information available as of May 14,
2010. Actual results may differ from the results projected and presented hereby for a variety of reasons.
2. With respect to the preconditions for the forecast of financial results, please refer to “(1) Analysis ofoperation results” under the “1. Operating results" section on page 5.

-4-

1. Operating results(1) Analysis of operation results(i) Overview of performance for the consolidated fiscal year under review
Year ended March
2009

Year ended March2010

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(%)

Change89,551

88,147(1,404)

(1.6)

6,719

6,999

279

4.2

6,711

7,006

295

4.4

3,770

3,498

(271)

(7.2)

195.88186.40(9.48)(4.8)

During the fiscal year under review, although there are expectations that the Japanese economy will
recover especially in export and manufacturing, there are concerns over the prolongation of deflation.
In the medical equipment industry, the remuneration for medical services was positively changed forthe first time in ten years this spring, and the business environment surrounding medical institutions is
expected to improve. However, concern that patients may become less likely to seek medical treatment
posed by the self-pay ratio increased, the future of the industry still remains uncertain.
Under such economic circumstances, the Group posted a consolidated net sale of 88,147 million yen(down 1.6% year-on-year) for the consolidated fiscal year under review due to reduction in the number oflarge-scale business deals. With regard to incomes, as a result of improved gross margin ratio andcost-cutting efforts in every field other than research and development investment, consolidated operating
income, ordinary income and net income totaled 6,999 (up 4.2% year-on-year), 7,006 (up 4.4%
year-on-year) and 3,498 (down 7.2% year-on-year) million yen, respectively.
(ii) Overview of performance for the consolidated fiscal year under review by segment
Business segment

Physiologicaldiagnostic equipment
Patient
monitoring
equipment
Medicaltreatment
equipment
Other products andaccessories
Total

Year ended March 2009

Year ended March 2010

Amount(millionyen)

Amount(millionyen)

Ratio (%)

Ratio (%)

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

24,48627.4

22,89926.0(1,587)

(6.5)

6,189

6.9

6,070

6.9

(119)

(1.9)

36,56040.8

35,972

40.8

(588)

(1.6)

22,31424.9

23,204

26.3

890

4.0

89,551

100.0

88,147100.0(1,404)(1.6)

A. Physiological diagnostic equipment segment
During the final quarter of the consolidated term, sales of electrocardiographs increased, but did
not compensate for the decrease in demand up to the third quarter of the consolidated term.
Sales of ultrasound diagnostic imaging systems declined both domestically and abroad.
Sales of vascular screening systems, blood cell counters, and air sterilization and deodorizationequipment continued to increase, but sales of the stock products have decreased due to reduction in-5-the number of large-scale business deals
As a result, consolidated net sales amounted to 22,899 million yen (down 6.5% year-on-year).
B. Patient monitoring equipment segment
During the final quarter of the consolidated term, sales increased both domestically and abroad. It
was enough to recover the decrease in the domestic market up to the third quarter of the consolidated
term, but did not compensate for the decrease abroad.
As a result, consolidated net sales amounted to 6,070 million yen (down 1.9% year-on-year).
C. Medical treatment equipment segment
During the final quarter of the consolidated term, the business of renting medical equipment forhome treatment, sales of pacemakers, and sales of ventilators continued to increase due to thedemand caused by the new types of influenza.
Sales of catheter increased and compensate for the decrease in demand up to the third quarter ofthe consolidated term.
Sales of Automated External Defibrillators (AEDs) declined, affected by the business downturn.
As a result, consolidated net sales amounted to 35,972 million yen (down 1.6% year-on-year).
D. Other products and accessories segment
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.
Consolidated net sales for this segment were 23,204 million yen (up 4.0% year-on-year).
(iii) Outlook for fiscal year ending March 2011

Net sales (million
yen)
Operating income(million yen)
Ordinary income(million yen)Net
income(million yen)
Net income pershare (yen)Year ended
March 2010

Year ending
March 2011

AmountAmountComparison with the previous year
Rate of change(%)

Change88,14789,500

1,352

1.5

6,999

7,000

0

0.0

7,006

7,000

(6)

(0.1)

3,498

3,500

1

0.0

186.40186.490.09

0.0

In the medical equipment industry, while the business environment surrounding the medical institutions
is expected to improve due to the positive change in the remuneration for medical services, there are also
concerns about the consultation behavior of patients and the end of investment in the new type of
influenza. It is expected; therefore, that the industry’s business environment will continues to be harsh.
In consideration of such circumstances, the Group expects consolidated net sales of 89,500 million yen,operating income of 7,000 million yen, ordinary income of 7,000 million yen, and net income of 3,500
million yen for the fiscal year ending March 2011.
(2) Analysis of financial situation(i) Assets, liabilities and net assets
Total assets increased 1,708 million yen from the end of the previous fiscal year to 102,909 million
yen. The main factors are the increase of 763 million yen in ‘trade notes and accounts receivable’ and theincrease of 1,584 million yen in ‘investment securities’ despite a decrease of 1,562 million yen in ‘merchandise and-6-

products’.

Total liabilities increased 455 million yen from the end of the previous fiscal year to reach 26,859
million yen. The main factors are the increase of 1,435 million yen in ‘Trade notes and accounts payable’
despite a decrease of 916 million yen in ‘short-term borrowings’.
Total net assets increased 1,253 million yen from the end of the previous fiscal year to reach 76,049
million yen, due primarily to an increase of 1,980 million yen in ‘retained earnings’ and an increase of
1,006 million yen in ‘evaluation difference on other securities’ despite an increase of 1,735 million yen in‘treasury stock’.
(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
2009

Year ended March
2010

14,663

12,195(2,468)(6,478)(7,516)(1,037)(2,342)(4,279)(1,937)

(166)

(11)

155

5,676

388

(5,287)

27,63428,023388

ChangeCash flows from operating activities
In the consolidated fiscal year under review, net cash provided by operating activities was 12,195
million yen, down 2,468 million yen from the previous year.
Included are ‘net income before taxes’ of 6,471 million yen, ‘depreciation costs’ of 5,813 million yen
and ‘decrease in inventories’ of 1,504 million yen.
Cash flows from investing activities
Net cash used in investing activities was 7,516 million yen, up 1,037 million yen from the previous
year.
Payments for the ‘acquisition of tangible fixed assets’ amounted to 5,149 million yen and ‘securities
and investment’ securities were 2,168 million yen.
Cash flows from financing activities
Net cash used in financing activities was 4,279 million yen, up 1,937 million yen, mainly because of
the payment of ‘purchase of treasury stock’ of 1,735 million yen and ‘dividends’ of 1,508 million yen.
As a result, the outstanding balance of cash and cash equivalents was 28,023 million yen at the end of
the fiscal year, up 388 million yen compared to the end of the previous fiscal year.

-7-

(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 2006

Year
ended
March 2007

Year
ended
March 2008

Year
ended
March 2009

Year
ended
March 2010

70.1

71.9

74.1

73.9

73.9

77.8

76.8

47.2

36.4

38.8

0.5

0.4

0.6

0.2

0.2

173.2

124.3

69.1

275.5

419.6

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 whichinterest is 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 year ended March 2010 and fiscal year
ending 2011
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 concretely more than
30% consolidated payout ratio, by improving and reinforcing its corporate structure and expanding
competitive businesses while securing the necessary internal reserves. The Company has set the minimum
trading unit at 100 shares, aiming to have its shares spread further 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, andimplement and work out measures for enhancing the liquidity of our shares on the market.
Year-end dividend of 40 yen per share will be paid for the fiscal year under review, making annual
dividend 80 yen per share as in the previous year inclusive of interim dividend of 40 yen per share.
(4) Business risks(i) Effect of medical administration
The Japanese Government has been pushing forward with its policies of improving the quality of
medical care and curtailing the medical costs, and the remuneration for medical services, and theofficial reimbursement prices for drugs and specific insurance medical materials are revised every
two years. Changes in the governmental health care policies may lead to intensified competition
within the market and lowered sales prices, thus adversely affecting the operating results andfinancial standing of the Group.
(ii) Legal regulations
The manufacture and sales of medical equipment are subject to regulations prescribed in the
Pharmaceutical Affairs Law, and it may take a certain period of time for a new medical equipment to
be investigated and finally approved for sale. In addition, some medical equipment requires clinical
trials, thus taking a long period of time before it is launched in the market.
If the current regulations are revised, new ones are introduced, or any other unpredictable-8-regulatory change is made in the future, it is likely that this will adversely affect the operating results
and financial standing of the Group.
(iii) High dependence on certain business partners with which continuation of transactions is unsure
The Company imports and sells ventilators, pacemakers, defibrillators, heart catheters and otherdevices and equipment. We strive to ensure that we can continue making transactions. If any problem
arises that will make it impossible to continue stable transactions with the exporters, the operating
results and financial standing of the Group will be adversely affected. To prevent this, sufficient carehas been taken not to depend too heavily on a few specific companies for the supply of thoseequipments.
(iv) Product quality
The Group manufactures the products under a rigorous quality control system that is strictly in
conformance with the international standards including ISO. If any quality problem arises due tounforeseen failure or defect of a product, suspension of sale and recall of such product may beordered by the authorities concerned, adversely affecting the operating results and financial standingof the Group.
(v) Risks accompanying overseas businesses
The Company not only supplies products to distributors overseas, but also has its own overseas
sales, development and production bases. Hence, it is possible that unforeseen changes to laws andregulations in foreign countries, as well as terrorist acts, natural disasters, or other incidents 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 13.47% of the Company’s voting
rights (as of March 31, 2010). Kotaro Fukuda, President and CEO of the Company, and his close
relatives own 100% of the shares in Atomic Sangyo.
Atomic Sangyo produces and sells electrocardiogram recording paper, and also engages in thebusiness of renting real estate. The Company purchases recording paper and accounting slips andrents offices from Atomic Sangyo.
Decisions on the prices of recording paper and accounting slips are based on negotiations andconsideration of market prices, and payment terms are the same as those generally adopted in themarketplace.
Office rental contracts are based on actual transactions in nearby locations.

-9-2. The Fukuda Denshi GroupThe Company consists of 55 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.; and Beijing Fukuda Denshi
Medical Instruments Co., Ltd.
Purchase:
Fukuda Denshi Co., Ltd
Sales:
Fukuda Denshi Co., Ltd; Fukuda Life Tech Co., Ltd.; Fukuda Denshi Hokkaido and othersales subsidiaries.; Fukuda Denshi USA, Inc; 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
and for patients with acute cardiac disease.
Major companies involved
Production: Fukuda Denshi Co., Ltd; Fukuda Denshi Tagajo Co., Ltd.; and Beijing Fukuda Denshi
Medical Instruments Co., Ltd.
Purchase:
Fukuda Denshi Co., Ltd
Sales:
Fukuda Denshi Co., Ltd; Fukuda Denshi Hokkaido and other sales subsidiaries; Fukuda
Denshi USA, Inc; 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
Sales:
Fukuda Denshi Co., Ltd; Fukuda Life Tech Co., Ltd.; Fukuda Denshi Hokkaido and othersales 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 Denshi Hokkaido and othersales subsidiaries- 10 -

Diagram of the Group’s business structure

Major customers
Japan

Overseas
Products andmerchandise

Products andmerchandise

Consolidated subsidiary
Fukuda Denshi USA,Inc.

RentalRepairs in Japan

Domestic warehousemanagement andpacking/shipping

Consolidated subsidiary
Fukuda Denshi
Technology Service

Consolidated subsidiaries
Fukuda Logistics
CenterProducts andmerchandise

Entrustment of
warehousemanagement andpacking/shipping

Parts

Supply of materials

Consolidated
subsidiary
Fukuda Life
Tech Co.,
Ltd.

Consolidated subsidiaryBeijing Fukuda
Denshi Medical
Instruments Co., Ltd.

Repairs

Products andmerchandise

Products and merchandise

Rental

Products and merchandise

Products and merchandise

Consolidated subsidiaries
Fukuda Denshi Hokkaido and other sales subsidiaries

Products

Consolidated
subsidiary
Fukuda Denshi
Switzerland AG

Entrustment ofresearch anddevelopment

Fukuda Denshi
Medical treatment
equipment segment

Outsourcing of processing

Patient monitoring
equipment segment
Supply of materials

Outsourcing of processing

Supply of materials

Physiological diagnostic
equipment segment

Other products andaccessories segment

Supply ofmaterials

Unconsolidated subsidiaries
ME Times
Miyagi Prefecture Medical Information ResearchCenterNiigata Medical Information Development Center
IVAC
Affiliated company not accounted for by theequity method
Fukuda Pulmo

Products*
Related party
Atomic Sangyo
Co., Ltd.

Consolidated subsidiary
Fukuda Denshi Tagajo Co., Ltd.

Publication, sales, and other processing of medical books

Products

Non-life insurance agency operations
Unconsolidated
subsidiaries
Fukushin* Related party Atomic Sangyo Co., Ltd. manufactures recording paper for medical electronic equipment andsupplies it to Fukuda Denshi’s other products and accessories segment.
.

- 11 -

3. Management policy(1) Basic policies for corporate management
Since its foundation in 1935, the Company has contributed significantly to the advancement of people’s
health through the production and sale of a wide range of medical equipment, centering on respiratory andcirculatory 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 in themaintenance 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 a
consolidated ordinary income of 8,000 million yen or more and a payout ratio of 30% or more.
(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 2011 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;
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;- 12 -

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 Board of Directors approved on the acquisition of Fukuda Denshi’s own shares under the
Article 156 of the Companies Act of Japan applied as mutatis mutandis stipulated under the Article
165 (3) of the same Law during its meeting held on August 19, 2009, and as of August 25, 2009,
779,700 common shares have been acquired through a fixed price trading, which amounted to 1,734
million yen.
(ii) Important contracts concerning management
There are no applicable matters.

- 13 -

4. Consolidated financial statements(1) Consolidated balance sheets(Million yen)Previous fiscal year
(as of March 31, 2009)
AssetsCurrent assets
Cash and deposits
Trade notes and accounts receivable
Securities
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
Allowance for investment loss
Total investments and other assets
Total fixed assets
Total assets- 14 -*1

Fiscal year under review(as of March 31, 2010)

28,224
23,319
999
8,483
44
1,642
1,956
994
(243)
65,421

28,63024,082
1,099
6,920
86
1,664
1,874
1,140
(212)
65,285

8,736

8,807

(4,413)(4,687)

4,322
649

4,120
665

(388)

(435)

260
23,767229
23,120(14,316)(13,506)

9,451
5,792
176

9,613
5,938
291

(28)

(83)

147
0
19,975
2,668

208
34
20,144
2,344

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

*1 *3

7,422
3,326
4,657
(18)
(251)
15,13437,623102,909(Million yen)Previous fiscal year
(as of March 31, 2009)
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
Provision of allowance for product warranty
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- 15 -

Fiscal year under review(as of March 31, 2010)

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

13,836
1,950
80
1,497
1,654
117
303
2,754
22,195

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

214
3,397
173
879
4,664
26,8594,621
9,982
61,693(766)
75,531

4,621
9,982
63,674(2,501)75,777

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

411
(139)
272
76,049102,909(2) Consolidated statements of income
Previous fiscal year

(Million yen)
Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

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

89,55150,54939,00232,282
6,719

*2

*1 *2

Foreign exchange losses
Provision for allowance for investment loss

Loss on investment in partnership
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gains on sale of fixed assets
Gains on reversal of allowance for doubtful accounts
Gains on reversal of allowance for losses on
restructuring
Gains on insurance surrender
Profit from insurance claim
OthersTotal extraordinary gains
Extraordinary losses
Losses from the prior-period adjustment
Losses on sale of fixed assets
Losses on disposal of fixed assets
Impairment losses
Loss on valuation of investment securities
Loss on valuation of golf club membership
OthersTotal 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- 16 -

*3

*5
*6
*7

88,14747,75440,39233,393
6,999

*2

*1 *2

23
162
224
410

23
160
37
155
377

56
298
51
12
418
6,711

29
251
74
14
370
7,006

7
-

*3

4
10

68

2

614
691

323
33
2
377

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

*4
*5
*6
*7

129
0
18
10
698
1
54
912
6,471
2,823
149
2,972

1

0

3,770

3,498

(3) Statements of changes in shareholders’ equity(Million yen)Previous fiscal year

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

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 fiscalyear- 17 -

4,621

4,621

4,621

4,621

9,982

9,982

(0)

(0)

(0)

(0)

9,982

9,982

59,473

61,693(1,539)(1,508)

(10)

(8)

3,770
2,220
61,693

3,498
1,980
63,674

(766)

(766)

(0)
1
0
(766)

(1,735)0(1,735)(2,501)

73,31175,531(1,539)(1,508)

(10)

(8)

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

3,498(1,735)0245
75,777447(595)(1,042)

1,006(1,042)
(595)

1,006
411

63

(149)

(Million yen)Previous fiscal year

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

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

(213)

10

(213)
(149)

10
(139)

510

(745)

(1,255)

1,017(1,255)
(745)

1,017
272

11

9

(2)

(9)

(2)
9

(9)
-

73,83374,795(1,539)(1,508)

(10)

(8)

3,770
(0)
1

3,498
(1,735)0(1,258)1,008

962
74,795

1,253
76,049Note 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.

- 18 -

(4) Consolidated statements of cash flows(Million yen)
Fiscal year under review

Previous fiscal year
(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

6,277
5,397

6,471
5,813

(108)

(3)

14

10

-

251

(97)

(28)

73

(84)

14

4

-

303

133

166

(5)

(18)

(186)
56
8
133

(183)
29
(4)
18

959

698

(614)
344
3,122
(544)

(323)
(778)
1,504
854

158

(35)

881
16,019171(53)
30(1,504)
14,663138
14,804172(29)
68(2,820)12,195(8)(5,520)(220)(16)(5,149)(502)(1,302)(2,168)

1,000

1,000

(1,120)

(915)

1,121

256

(200)
(227)
(6,478)(100)
78(7,516)

(700)

(900)

(66)
(0)
1
(1,540)(66)(1,735)0(1,508)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 forinvestment loss
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 for
product warranties
Increase (decrease) in allowance forretirement benefits to employees
Increase (decrease) in allowance forretirement benefits to officers
Interest and dividend income
Interest expenses
Losses (gains) from sale of fixed assets
Losses on disposal of fixed assets
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 insurance reserve
Proceeds from reversal of insurance
reserve
Payments for loans
Other
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Repayment of long-term borrowings
Purchase of treasury stock
Sale of treasury stock
Dividends paid

- 19 -

(Million yen)
Fiscal year under review

Previous fiscal year
(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

(33)
(1)
(2,342)(67)(1)(4,279)

(166)

(11)

5,676

388

21,95827,634

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
Cash and cash equivalents at the end of the
fiscal year*1

- 20 -

27,634*1

28,023

(5)Events or conditions that may cast significant doubt upon the entity’s ability to continue as a going
concern
Not applicable(6)Basic significant matters regarding the preparation of consolidated financial statements

1. Scope
consolidation

2. Application
equity methodofofPrevious fiscal year
(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

Fiscal year under review(April 1, 2009 to March 31, 2010)(1) Numberofconsolidated
subsidiaries: 51
Major consolidated subsidiaries
are as follows:
Fukuda Life Tech Co., Ltd.
Fukuda Denshi Hokkaido(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.

(2) Names and other details of major
unconsolidated subsidiaries
Of the subsidiaries, ME Times,
Fukushin
and
two
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.

(1) Number of affiliated companies
accounted for by equity method＿(1) Number of affiliated companies
accounted for by equity method＿(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.

(2) Names and other details of
unconsolidated subsidiaries andaffiliates that are not accounted
for by equity methodThe
four
unconsolidated
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 influence on the
consolidated interim financial
statements. Accordingly, we did
not
apply
equitymethodaccounting to them.

- 21 -

Fukuda Cardiac Laboratory Co.,
Ltd. Went into liquidation as ofNovember 2, 2009, and was
excluded from the scope of
consolidation.

3. Accounting period,
etc. of consolidated
subsidiaries

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

Previous fiscal year
(April 1, 2008 to March 31, 2009)
The accounts of consolidated
subsidiaries Fukuda Denshi USA,
Inc.; and Fukuda Denshi Switzerland
AG close on December 31 of eachyear.
In the preparation of
consolidated financial statements,
consolidated subsidiaries’ financial
statements as of the said date wereused, and with respect to significant
transactions that occurred between
the said date and the consolidated
book-closing, adjustments necessary
for consolidation were made.

(i) Securities
Held-to-maturity securities- Amortized cost method

Fiscal year under review(April 1, 2009 to March 31, 2010)Same as on the left(i) Securities
Held-to-maturity securities
Same as on the left

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 the moving
average method.)

Other securities
Marketable securities

Non-marketable securities- Stated at cost based on the moving
average method.
For investments in the investment
enterprise
limitedLiability
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
to the ownership percentage is used,based on the most recent financial
statements available as of thereporting date and other material
stipulated in the partnershipcontract.

Non-marketable securities- 22 -

Same as on the left

Same as on the left

Previous fiscal year
(April 1, 2008 to March 31, 2009)(ii) Inventories
The cost method (the amounts statedin the balance sheets are calculated
by writing down the book values
based on lower profitability) is used
as a valuation standard.

Fiscal year under review(April 1, 2009 to March 31, 2010)(ii) Inventories
Same as on the left

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.

- 23 -＿

(2) Depreciation
method forsignificant
depreciable
assetsPrevious fiscal year
(April 1, 2008 to March 31, 2009)(i) Tangible fixed assets
Depreciated primarily by the
declining balance method. However,buildings (except for building
attachments) acquired on or after
April 1, 1998 were depreciated using
the straight-line method.
Major useful life:
Buildings and structures: 3–60 years
Machinery and delivery equipment:
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 evenly amortizedover a three-year period.
Of the tools, instruments andfixtures, the oxygen concentrator
devices (assets for rental) weredepreciated using the straight-line
method with the estimated rental
period (four years) used as thenumber of depreciation years.

Fiscal year under review(April 1, 2009 to March 31, 2010)(i) Tangible fixed assets (excluding
lease assets)(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)
ora
uniform
amortization over the effective
remaining sales period.

(ii) Intangible fixed assets (excluding
lease assets)(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
to be accounted for in a similarmanner with the ordinary rental
transactions.

(iii) Lease assets- 24 -

Same as on the left

Same as on the left

Same as on the left

(3) Basisprovision
allowances

forofPrevious fiscal year
(April 1, 2008 to March 31, 2009)(i) Allowance for doubtful accounts
To prepare for losses incurred bybad debts, the amount of potential
loss is calculated by using thehistorical loss ratio in the case ofgeneral loans or receivables.
Potential loss for specific loans or
receivables, for which we haveconcerns
regardingtheircollectability, is calculated byassessing the possibility of collection
for each individual account.

Fiscal year under review(April 1, 2009 to March 31, 2010)(i) Allowance for doubtful accounts(ii) Allowance for bonuses to
employees
To prepare for the payment ofbonuses to employees, an amountcorresponding to this fiscal year’s
portion of estimated bonus payments
was reserved.

(ii) Allowance
employees(iii) Allowance for bonuses to
officers
To prepare for the payment ofbonuses to directors and corporate
auditors, an amount corresponding tothis fiscal year’s portion of estimatedbonus payments was reserved.

(iii) Allowance for bonuses to officers(iv) Allowanceforlossesonrestructuring
To prepare for losses on
restructuring, the amount of theestimated losses was reserved.

＿- 25 -

Same as on the leftforbonusestoSame as on the left

Same as on the left

Previous fiscal year
(April 1, 2008 to March 31, 2009)(v) Allowance for retirement benefits
to employees
To prepare for the payment of
retirement benefits to employees, theamount recognized as accruing at theend of this fiscal year was reserved,
based on the estimated retirement
benefit obligation and pension assets
at the end of this fiscal year.
Prior service costs are amortized,using the straight-line method over acertain number of years (10 years),
which are less than the averageremaining years of service of theemployees when they incurred.
Actuarialdifferencesareamortized, using the straight-line
basis over a certain number of years(10 years), which are less than the
average remaining years of service ofthe employees when they incurred,from the fiscal year after the one inwhich they arise.

Fiscal year under review(April 1, 2009 to March 31, 2010)(iv) Allowance for retirement benefits
to employees＿(Changes in accounting policies)
The Partial Revision of the“Accounting Standards for Retirement
Benefits”, Part 3 (ASBJ Statement
No. 19 of July 31, 2008) has been
applied starting from the consolidated
fiscal year under review.
This does not affect the operating
income, ordinary income, or net
income before taxes.

＿(Additional information)
Fukuda Denshi revised theretirement pension system on October
1, 2009, and moved from theapproved retirement annuity system tothe defined benefit corporate pension
system (contract-type) based on therelevant act.
The company applied the“Accounting methods related to shift
between retirement pension schemes”(ASBJ Guidance No.1 for applying
corporate standards) for theaccounting operations associated withthis move.
In addition, the influence according
to this revision is negligible.

- 26 -

Same as on the left

Previous fiscal year
(April 1, 2008 to March 31, 2009)(vi) Allowance for retirement benefits
to officers
To prepare for the payment of
retirement benefits to directors andcorporate
auditors,
some
consolidated subsidiaries reserve theestimated amount to be paid at theend of the fiscal year, in accordancewith the internal regulations.
＿Fiscal year under review(April 1, 2009 to March 31, 2010)(v) Allowance for retirement benefits toofficers
Same as on the left(vi) Allowance for product warranty
To prepare for the expenses
incurred by the free repair to be
implemented after the delivery of the
products, estimated amount of therepair expenses was reserved on thebasis of the estimated proportion ofsuch expenses to net sales and theestimated amount of such expenses
for individual products.

- 27 -

Previous fiscal year
(April 1, 2008 to March 31, 2009)＿

Fiscal year under review(April 1, 2009 to March 31, 2010)(Changes in accounting policies)
Previously, the expenses for thefree repair were booked as they arose.
Following the implementation of the
ERP system, it has been madepossible to make a reasonableestimation of the expenses to be
incurred in the future on the basis of
the previous records of such
expenses. To optimize the period of
profit/loss and make the financial
structure healthier, the estimatedamount of expenses to be incurred in
the future was reserved as allowance
starting from the consolidated fiscal
year under review.
As a result of this change, 303
million yen was reserved as provisionof allowance for product warranty inthe consolidated fiscal year underreview.
Consequently,
gross
profit,operating income, ordinary income,and net income before taxes
decreased by 303 million yen,respectively.
As a reasonable estimation of theabove expenses was made possible atthe end of the consolidated fiscal year
under review, allowance for productwarranty was not calculated for theprevious consolidated fiscal year andthe first three quarters of theconsolidated fiscal year under review.

__(vii) Allowance for investment loss
To prepare for the loss expected to
be incurred in the investment
activities, allowance for investment
loss was reserved taking into accountthe financial standing and other dataof the companies in which investment
is being made.

- 28 -

(4) Standards
fortranslationofimportantforeigncurrency-based
assetsor
liabilities into
Japanese yen(5) 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, 2008 to March 31, 2009)
Monetary
credits
anddebts
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.

Fiscal year under review(April 1, 2009 to March 31, 2010)

Accounting treatment of consumption
tax and other taxes
Consumption tax and other taxes are
excluded from profits and losses.

Accounting treatment of consumption
tax and other taxes

Assets and liabilities of consolidated
subsidiaries are valued using thefull-fair-value method.
Negative goodwill is amortized overa five-year period.
Cash (cash and cash equivalents) inthe 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.

- 29 -

Same as on the left

Same as on the left

Same as on the left

Same as on the left

Same as on the left

(7) Changes in basic significant matters regarding the preparation of consolidated financial statements
Previous fiscal year
(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.

Fiscal year under review(April 1, 2009 to March 31, 2010)(Accounting principles of expenses for researchand development)
Previously, expenses for the development of new
products in research and development activities
were posted as cost of sales. However, effectivefrom the first quarter under review, such expenses
are treated as general and administrative expenses,
with a view to appropriately grasping the costs
corresponding to sales and more properly
indicating profit/loss for the period, more properly
taking advantage of the building of a system tomanage expenses incurred in developing new
products, since the development of new products
has come to be regarded less as cost, and more as
research and development as it involves thedevelopment of new technologies and newmechanisms.
As a result of this change, cost of sales decreased
1,512 million yen and gross profit increased by thesame amount for the consolidated year underreview compared with the figures under theprevious method, while operating income andordinary income each declined 6 million yen due toan increase of 1,505 million yen in selling, generaland administrative expenses.
Net income before taxes decreased 122 million
yen, since 129 million yen, equivalent to researchand development expenses in indirect
manufacturing cost, which were included in
beginning inventories, was posted as extraordinary
losses.

- 30 -

Previous fiscal year
(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.

- 31 -

Fiscal year under review(April 1, 2009 to March 31, 2010)＿

(8) Changes in the presentation
Previous fiscal year
(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.

Fiscal year under review(April 1, 2009 to March 31, 2010)＿(Consolidated statements of income)Investment partnership losses, which was
included in Other under Non-operating expenses in
the previous consolidated fiscal year, wasseparately presented from this fiscal year as theamount of such losses exceeded 10/100th of
non-operating expenses.
In the previous consolidated fiscal year,
Investment partnership losses were 11 million yen.

＿

- 32 -

(9) Notes(Consolidated balance sheets)
Previous fiscal year
(as of March 31, 2009)*1. Notes to unconsolidated subsidiaries andaffiliated companies
Unconsolidated subsidiaries and affiliatedcompanies:
Investment securities:
48 million yen(Stocks)

Fiscal year under review(as of March 31, 2010)*1. Notes to unconsolidated subsidiaries andaffiliated companies
Unconsolidated subsidiaries and affiliatedcompanies:
Investment securities:
46 million yen(Stocks)*2. Discount on bills:(Discount on export bills)*2. Discount on bills:(Discount on export bills)

397 million yen＿

90 million yen*3. Notes to unconsolidated subsidiaries andaffiliated companies
The amount of investment securities includes
420 million yen of advance on subscription for
new stock paid in connection with the purchaseof stocks issued by The Dai-ichi Life InsuranceCo., Ltd., which was demutualized as of April
1, 2010.

(Consolidated statements of income)Previous fiscal year
(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

Fiscal year under review(April 1, 2009 to March 31, 2010)*1. Major items and amounts of Selling, generaland administrative expenses are as follows:
Salaries, benefits, and other monies to
officers and employees: 11,601 million yen
Bonuses and provision of allowance forbonuses:
2,660 million yen
Provision of allowance for retirement benefits
to officers:
39 million yen
Retirement benefit expenses: 892 million yen
Depreciation:
1,571 million yen
Provision of allowance for bonuses to
officers:
117 million yen*2. Research and development expenses included in
the General and administrative expenses andManufacturing expenses for this fiscal year are
2,005 million yen.

*2. Research and development expenses includedin the General and administrative expenses
and Manufacturing expenses for this fiscal
year are 3,216 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*3 Breakdown of Gains on sale of fixed assets
Machinery and delivery equipment:
4 million yen
Tools, instruments and fixtures: 0 million yen
Total
4 million yen- 33 -

Previous fiscal year
(April 1, 2008 to March 31, 2009)＿

Fiscal year under review(April 1, 2009 to March 31, 2010)*4. Losses from the prior-term adjustment
Because the accounting method for expenses
incurred in the development of new products
under the research and development activities
was changed starting from the consolidated fiscal
year under review, 129 million yen of researchand development expenses among indirect
manufacturing cost, which was included ininventories at the beginning of the fiscal year,
was booked as loss on prior period adjustment in
extraordinary losses.

*5. 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 sale of fixed assets
Machinery and delivery equipment:
0 million yen
Total
0 million yen*6 Breakdown of Losses on disposal of fixed assets
Buildings 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*6 Breakdown of Losses on disposal of fixed
assetsBuildings and structures:
2 million yen
Machinery and delivery equipment:
4 million yen
Tools, instruments and fixtures: 10 million yen
Intangible fixed assets:
0 million yen
Total
18 million yen- 34 -

Previous fiscal year
(April 1, 2008 to March 31, 2009)*7. Impairment losses
The Company groups its operations by businesssegment, and consolidated subsidiaries form theirgrouping with each company or office as one unit.
Impairment losses on leased real estate and idle
assets are recognized separately.
Because of a decrease in cash flows caused by adeclined operating income, we have written down
the book values of the following assets torecoverable values.
These write-offs haveresulted in impairment losses (of 14 million yen),which were booked as extraordinary losses.
These impairment losses consist of the losses
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 roadside land prices or theassessed value of fixed asset tax, with reasonableadjustments.
Use of assets
Operational
assetsLocation ofassetsMatsuyama
City, Ehime
Prefecture
and anotherlocation

Type ofassetsTools,
instruments
andfixtures

Amount(million yen)

Fiscal year under review(April 1, 2009 to March 31, 2010)*7. 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 bya declined operating income and a fall of themarket price, we have written down the bookvalues of the following assets to recoverable
values. These write-offs have resulted in
impairment losses (of 10 million yen), whichwere booked as extraordinary losses.
These impairment losses consist of the losses
on land property of 4 million yen, on leaseassets of 5 million yen, and on other assets of 0
million yen.
The recoverable value was assessed according
to the net sale value, and the market prices
were evaluated according to roadside land
prices or the assessed value of fixed asset tax,
with reasonable adjustments.

14

Use of assets
Idle assets

Operational
assets- 35 -

Location ofassets
Nasu
County,Tochigi
Prefecture
SapporoCity,
Hokkaido

Type ofassetsLand
property

Lease andlease
assetsAmount(million yen)
45

(Statements of changes in shareholders’ equity)
Previous fiscal year (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 shares
Increase in
Decrease in
Number of sharesat the end of
number of shares
number of sharesat the end of theprevious fiscal
for fiscal year
for fiscal year
fiscal year underyear
under review
under review
review(1,000 shares)(1,000 shares)(1,000 shares)(1,000 shares)
Number of issued
sharesCommon stock
19,58819,588
Total
19,58819,588Treasury stock
Common
stock
340
0
0
339
(Note)
Total
340
0
0
339
Note: The increase of 0 in treasury stock of common stock reflects the increase owing to the repurchaseof shares less than the trading unit.
The decrease of 0 in treasury stock of common stock reflects the decrease owing to the disposal ofshares 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
Total
Dividends
dividend
RecordEffective
Type of
Source foramountper share(Resolution)
date
date
sharesdividends(million(in yen)yen)
Ordinary
GeneralMeetingofMarch 31,
June 29,
Retained
Common
40
769
2009
2009
earnings
Shareholders held on
stock
June 26, 2009- 36 -

Fiscal year under review (from April 1, 2009 to March 31, 2010)
1. Type and total number of issued shares and type and number of shares of treasury stock
Number of shares
Increase in
Decrease in
Number of sharesat the end of
number of shares
number of sharesat the end of theprevious fiscal
for fiscal year
for fiscal year
fiscal year underyear
under review
under review
review(1,000 shares)(1,000 shares)(1,000 shares)(1,000 shares)
Number of issued
sharesCommon stock
19,58819,588
Total
19,58819,588Treasury stock
Common
stock
339
780
0
1,119
(Note)
Total
339
780
0
1,119
Note:

The increase of 780 thousand shares in treasury stock of common stock reflects the increase of779 thousand shares and 0 thousand shares owing to the acquisition of treasury stock andrepurchase of shares less than the trading unit, respectively, in accordance with the provisions ofArticle 156 as applied pursuant to the provisions of Article 165, Paragraph 3 of the Companies
Act.
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, 2009
Board of Directors’
meeting held on
October 30, 2009

Type ofsharesTotal
dividend
amount(million yen)

Dividends per
share(in yen)Record date

Effective dateCommon
stock

769

40

March 31,2009

June 29,
2009

Common
stock

738

40

September
30, 2009

December 5,
2009(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
Total
Dividends
dividend
RecordEffective
Type of
Source foramountper share(Resolution)
date
date
sharesdividends(million(in yen)yen)
Ordinary
GeneralMeetingofMarch 31,
June 30,
Retained
Common
40
738
2010
2010
earnings
Shareholders held on
stock
June 29, 2010

- 37 -

(Consolidated statements of cash flows)
Previous fiscal year
(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 adeposit period of over
(590 million yen)
three months:
Cash
and
cash
27,634 million yen
equivalents:

Fiscal year under review(April 1, 2009 to March 31, 2010)
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, 2010)
Cash and deposits:
28,630 million yen
Time deposits with adeposit period of over
(606 million yen)
three months:
Cash
and
cash
28,023 million yen
equivalents:

2. Details of important no fund transactions
The amounts of assets and liabilities in financelease transactions which are newly recognized forthe fiscal year under review are 232 million yen
each.

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 145 million yen
each.

- 38 -

(Lease transactions)Disclosure of lease transactions is omitted, as there is no significant necessity of such disclosure in
the summary report on financial results.
(Financial Products)
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, 2008 to March 31, 2009) and fiscal year under review (from April
1, 2009 to March 31, 2010):
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, 2008 to March 31, 2009):
Not applicable.
Fiscal year under review (from April 1, 2009 to March 31, 2010):
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.
(Real estates including rentals)
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, 2008 to March 31, 2009) and fiscal year under review (from April
1, 2009 to March 31, 2010):
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, 2008 to March 31, 2009) and fiscal year under review (from April
1, 2009 to March 31, 2010):- 39 -

Segment information by geographical area is omitted because the amounts of sales and assets inJapan account for over 90 percent of the total sales and total assets of all segments.
c. Overseas sales
Previous fiscal year (from April 1, 2008 to March 31, 2009) and fiscal year under review (from April
1, 2009 to March 31, 2010):
Overseas sales are omitted because such sales accounted for less than 10 percent of consolidated
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, 2008 to March 31, 2009):
Not applicable.
Fiscal year under review (from April 1, 2009 to March 31, 2010):
Not applicable.
(Per share information)

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

Previous fiscal year

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

3,885.41 yen
195.88 yen
Not stated, as there is nopotential dilution.

4,117.89 yen
186.40 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

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

3,770

3,498

-

-

3,770

3,498

19,247

18,768Net 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 -

5. Non-consolidated financial statements(1) Balance sheets(Million yen)Previous fiscal year
(as of March 31, 2009)
AssetsCurrent assets
Cash and deposits
Trade notes receivable
Accounts receivable
Securities
Merchandise and products
Work in progress
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
Long-term loans to employees
Long-term loans to affiliates
Long-term prepaid expenses
Deferred tax assets
Insurance reserves
Other- 41 -

Fiscal year under review(as of March 31, 2010)

15,741
53
21,279
999
2,937
12
1,388
50
267
661
4,275
686
266
(980)
47,63816,87929
20,539
1,099
3,082
48
1,372
122
252
757
3,751
198
313
(1,036)47,4106,195(3,064)
3,131
309
(235)
73
77
(47)

6,255
(3,252)
3,003
314
(247)
66
95
(53)

29

41

63
(45)
17
20,196(11,951)
8,245
4,814
68
(10)
57
0
16,36954(44)
921,233(11,996)
9,237
4,964
83
(27)
56
34
17,414

5
2,438
14
2,458

5
1,859
214
2,079

5,789
3,639
1
403
8
1,115
0
2,864
2,839
242

7,375
3,227
1
423
25
4
636
11
2,408
3,830
241

(Million yen)Previous fiscal year
(as of March 31, 2009)
Allowance for doubtful accounts
Allowance for investment loss
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
Allowance for product warranties
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, 2010)(4)
16,90135,73083,368(3)(277)
17,90437,39884,809

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

839
10,214
1,900
17
1,508
435
61
7,830

570

520

45

45

3

-

243
22,616285
64
23,723

46

41

1,098

1,142

841
1,987
24,604827
2,011
25,734

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

6,501

7,539

45,523(766)
59,361

46,560(2,501)
58,663

(596)

410

(596)

410

58,764
83,36859,07484,809(2) Statements of income(Million yen)Previous fiscal year

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

14,42033,904
8,115
56,44013,21632,781
8,624
54,622

1,984

1,336

10,443
12,4282,212

9,329
10,665
2,287

1,336

878

8,879

7,500

2,260

1,600

27,70529,966

26,85428,454

116

29

1,600

2,204

28,248
3,738
40,866
15,574

26,2204,226
37,947
16,674

627
607
523

765
581
441

-

56

1,930
283
330
157

2,017
284
309
192

45

45

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

1,285
736
224
3,190
1,156
2,608

12,177

13,894

3,397

2,780

106
1,443
293
105
1,949

88
1,230
279
43
81
1,724

68
293

60
-

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 costs
Total cost of sales
Gross profit
Selling, general and administrative expenses
Advertising expenses
Packing and freight charges
Service and repair expenses
Provision of allowance for doubtful
accounts
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- 43 -

(Million yen)Previous fiscal year

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

Provision of allowance for investment
loss
Loss on investment in partnership
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of fixed assets
Gain on liquidation of affiliates
Reversal of allowance for doubtful
accounts
Reversal of allowance for investment loss
Reversal of reserve for loss on liquidationof affiliates
Gains on insurance surrender
Total extraordinary gains
Extraordinary losses
Loss on prior period adjustment
Losses on disposal of fixed assets
Losses on sale of fixed assets
Loss on valuation of investment securities
Loss on valuation of affiliates stock prices
Other
Total extraordinary losses
Net income before taxes
Corporate, inhabitants’ and enterprise taxes
Corporate tax adjustments
Total income taxes
Net income- 44 -

-

277

51
0
413
4,932

74
2
415
4,089

4
-

4
552

54

-

22

-

68

2

602
752

323
883

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

129
10
698
359
44
1,242
3,729
1,104
78
1,183
2,546

Manufacturing statement

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.

Previous fiscal year

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

Amount(million yen)
7,649
2,173

Ratio
(%)
61.6
17.5

1,394
1,206

*2

*3

Amount(million yen)
7,823
2,359

Ratio
(%)
60.7
18.3

1,380
2,600
12,423

20.9
100.0

1,332

2,713
12,89639

12

40
12,50398
13,006

12

48

2,047
10,443

3,628
9,329

21.0
100.0

(Footnotes)
Previous fiscal year
(April 1, 2008 to March 31, 2009)1.

Fiscal year under review(April 1, 2009 to March 31, 2010)

Cost calculation method
The Company calculates cost of products by way
of job-order cost system (projection).
Costvariances are allocated to cost of sales, products
and work in progress at the end of the fiscal year.

1. Cost calculation method*2 Breakdown of transfer from other accounts
Current assets and others(Trial manufacture and40 million yen
research in progress)
Others0 million yen
Total
40 million yen*2 Breakdown of transfer from other accounts
Current assets and others(Trial manufacture and97 million yen
research in progress)
Others0 million yen
Total
98 million yen*3 Breakdown of transfer to other accounts
Research
and1,488 million yen
development expenses
Current assets and others(Trial manufacture and97 million yen
research in progress)
Others
461 million yen
Total
2,047 million yen*3 Breakdown of transfer to other accounts
Research
and2,780 million yen
development expenses
Current assets and others(Trial manufacture and
171 million yen
research in progress)
Others
676 million yen
Total
3,628 million yen

Same as on the left

- 45 -

(3) Statements of changes in shareholders’ equity(Million yen)Previous fiscal year

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

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 -

4,621

4,621

4,621

4,621

8,946

8,946

-

-

8,946

8,946

1,036

1,036

(0)

(0)

(0)

(0)

1,036

1,036

9,982

9,982

(0)

(0)

(0)

(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

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

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

- 47 -

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

5,045

6,501

(1,539)2,996(1,508)
2,546

1,456

1,037

6,501

7,539

44,06645,523(1,539)2,996(1,508)
2,546

1,456

1,037

45,523

46,560

(766)

(766)

(0)
1
0
(766)

(1,735)0(1,735)(2,501)

57,90359,361(1,539)
2,996
(0)
1
1,457
59,361(1,508)2,546(1,735)0(697)
58,663446(596)(1,042)

1,006(1,042)
(596)

1,006
410

(Million yen)Previous fiscal year

Fiscal year under review(April 1, 2008 to March 31, 2009)(April 1, 2009 to March 31, 2010)

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
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 -

446(596)(1,042)

1,006(1,042)
(596)

1,006
410

58,35058,764(1,539)
2,996
(0)
1

(1,508)2,546(1,735)0(1,042)

1,006

414
58,764309
59,074

(4) Events or conditions that may cast significant doubt upon the entity's ability to continue as a going
concern
Not applicable(5) Significant accounting policies
Item
1. Valuation standards andmethods for securities

Previous fiscal year

Fiscal year under review(from April 1, 2008 to March 31, 2009)(from April 1, 2009 to March 31, 2010)(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 based on themarket price as of the end of
the fiscal year.
(Unrealized holding gains orlosses are reported in acomponent of net assets, with thecost of securities sold is
calculated by the moving averagemethod.)(1) Held-to-maturity bonds
Same as on the left
(2) Shares of subsidiaries andaffiliates
Same as on the left

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 and Exchange
Law),
the
net
amountcorresponding to the ownership
percentage is used, based on the
mostrecentfinancialstatements available as of thereporting date and othermaterials stipulated in thepartnership contract.

Non-marketable securities- 49 -(3) Other securities
Marketable securities
Same as on the left

Same as on the left

Item
2. Valuation standards andmethods for inventories

Previous fiscal year

Fiscal year under review(from April 1, 2008 to March 31, 2009)(from April 1, 2009 to March 31, 2010)

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.

Same as on the left

Merchandise and products- Stated at cost determined by the
first-in, first-out method.
Raw materials- Stated at cost determined by thegross average method.
Work in progress- Stated at cost based on thespecific cost method.
Supplies- Stated based on the last purchaseprice 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.

- 50 -＿

Item
3. Depreciation method for
fixed assets

Previous fiscal year

Fiscal year under review(from April 1, 2008 to March 31, 2009)(from April 1, 2009 to March 31, 2010)(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
200,000yen
were
evenlyamortized over a three-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.

(1) Tangible
fixed
assets(excluding lease aseets)(Changes in accounting policies)
In accordance with the revision of
the Corporate Tax Law, from thisfiscal year, the Company haschanged the depreciation method
for tangible fixed assets acquiredon or after April 1, 2007 to themethod stipulated in the revised
Financial
Instruments
andExchange Law.
This change had little effect onearnings for this fiscal year.

＿- 51 -

Same as on the left

Item

Previous fiscal year

Fiscal year under review(from April 1, 2008 to March 31, 2009)(from April 1, 2009 to March 31, 2010)(Additional information)＿
In accordance with the revision of
the Corporate Tax Law, from thisfiscal year the Company haschanged the depreciation method
for tangible fixed assets acquiredon or before March 31, 2007 thatare fully depreciated to the
maximum allowable amount using
the depreciation method stipulated
in the pre-revision Corporate Tax
Law. From this fiscal year, thedepreciation method used by theCompany is the one in which it
evenly depreciates the residual
book value up to the reminder
value over five years, from thenext fiscal year of the fiscal year inwhich these assets are depreciatedto the maximum allowableamount.
This practice had little effect onearnings for this fiscal year.
(2) Intangible
fixed
assets(2) Intangible fixed assets(excluding lease assets)
Depreciated by the straight-line
method.
Same as on the left
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.
(3) Lease assets(3) Lease assets
Lease assets in finance lease
Same as on the lefttransactions 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 forwhich the inception of the leasepredates the beginning of the initial
year of application of the standard
continue to be accounted for in asimilar manner with the ordinary
rental transactions.

- 52 -

Item
4. Basis forallowances

provision

Previous fiscal year

Fiscal year under review(from April 1, 2008 to March 31, 2009)(from April 1, 2009 to March 31, 2010)

fordoubtfulof (1) Allowancefor
doubtful (1) Allowanceaccounts
accounts
To prepare for losses incurred bySame as on the left
bad debts, the amount of potential
loss is calculated by using thehistorical loss ratio in the case ofgeneral loans 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 bonuses for (2) Allowance for bonuses for
employees
employees
To prepare for the payment ofbonuses to employees, we reserve
Same as on the left
an amount corresponding to thisfiscal year’s portion of estimatedbonus payments to employees.
(3) Allowance for bonuses for (3) Allowance for bonuses forofficers
officers
To prepare for the payment ofbonusesfordirectors
andSame as on the left
corporate auditors, we reserve anamount corresponding to thisfiscal year’s portion of estimatedbonus payments to directors andcorporate auditors.
(4) Allowance for losses on (4) Allowance for losses on
liquidation of affiliates
liquidation of affiliates
To prepare for losses on
liquidation of affiliates, theSame as on the left
amount of the estimated losses wasreserved.
(5) Allowancefor
retirement (5) Allowance for retirement
benefits for employees
benefits for employees
To prepare for the payment ofSame as on the left
retirement benefits for employees,
the amount recognized as accruingat the end of this fiscal year was
reserved, based on estimatedretirement benefit obligation andpension assets at the end of thisfiscal year.
Actuarialdifferencesareamortized, 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.

- 53 -

Item

Previous fiscal year

Fiscal year under review(from April 1, 2008 to March 31, 2009)(from April 1, 2009 to March 31, 2010)＿(Changes in accounting policies)
The Partial Revision of the“AccountingStandards
forRetirement Benefits”, Part 3(ASBJ Statement No. 19 of July
31, 2008) has been applied startingfrom the fiscal year under review.
This does not affect theoperatingincome,ordinary
income, or net income before
taxes.

＿(Additional information)
Fukuda Denshi revised theretirement pension system on
October 1, 2009, and moved fromthe approved retirement annuity
system to the defined benefit
corporate pension system(contract-type) based on therelevant act.
The company applied the“Accounting methods related toshift between retirement pension
schemes” (ASBJ Guidance No.1
for applying corporate standards)
for the accounting operations
associated with this move.
In addition, the influenceaccording to this revision is
negligible.
(5) Allowancefor
product
warranty
To prepare for the expenses
incurred by free repair to be
implemented after the delivery of
the products, an estimated amountof the repair expenses wasreserved on the basis of theestimated proportion of such
expenses to net sales and theestimatedamountofsuchexpenses for individual products.

＿- 54 -

Item

Previous fiscal year

Fiscal year under review(from April 1, 2008 to March 31, 2009)(from April 1, 2009 to March 31, 2010)＿(Changes in accounting policies)
Previously, the expenses for thefree repair were booked as theyarose.
Followingtheimplementation of the ERP
system, it has been made possible
to make a reasonable estimate of
expenses to be incurred in the
future on the basis of the previous
records of such expenses. To
optimize the period profit/loss andmake the financial structure
healthier, the estimated amount ofexpenses to be incurred in the
future was reserved as allowance
starting from the fiscal year underreview.
As a result of this change, 285
million yen was reserved asprovision of allowance for productwarranty in the fiscal year underreview.
Consequently, gross profit,
operatingincome,ordinary
income, and net income before
taxes decreased by 285 million
yen, respectively.
As a reasonable estimation of
the above expenses became
possible at the end of the fiscal
year under review, the allowancefor product warranty was not
calculated until the previous fiscal
year and the first three quarters of
the fiscal year under review.
(6) Allowance for investment loss
To prepare for the loss expected
to be incurred in the investment
activities,
allowance
forinvestment loss was reserved
taking into account the financial
standing and other data of thecompanies in which investment isbeing made.

＿5. Other important matters for
preparation of financial
statements

Accounting
treatmentofconsumption tax, and other taxes,
etc.
The Consumption tax and othertaxes, etc. are excluded fromprofits and losses.

- 55 -

Accounting
treatmentofconsumption tax and other taxes,
etc.
Same as on the left

(6) Changes in accounting method
Previous fiscal year
(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.

Fiscal year under review(April 1, 2009 to March 31, 2010)(Accounting principles of expenses for researchand development)
Previously, expenses for the development of new
products in research and development activities
were posted as cost of sales. However, effectivefrom the first quarter under review, such expenses
are treated as general and administrative expenses,
with a view to appropriately grasping the costs
corresponding to sales and more properly
indicating profit/loss for the period, more properly
taking advantage of a system to manage expenses
incurred in developing new products, since thedevelopment of new products has come to be
regarded less as cost, and more as research anddevelopment as it involves the development of newtechnologies and new mechanisms.
As a result of this change, cost of sales decreased
1,512 million yen and gross profit increased by thesame amount for the year under review comparedwith the figures under the previous method, while
operating income and ordinary income eachdeclined 6 million yen due to an increase of 1,505
million yen in selling, general and administrative
expenses.
Net income before taxes decreased 122 million
yen, since 129 million yen, equivalent to researchand development expenses in indirect
manufacturing cost, which were included in
beginning inventories, was posted as extraordinary
losses.

- 56 -

6. Others
Not applicable- 57 -