Summary Report on Financial Results for Fiscal Year Ended March 2012(Japan GAAP)May 15th, 2012
Listing: OSE-JASDAQ
Company name: Fukuda Denshi Co., Ltd.
Code No.:

6960

Representative:

Kotaro Fukuda, President & CEO(http://www.fukuda.co.jp)

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:
Scheduled date for commencement of dividend payment:
Scheduled date for filing the securities report:
Supplementary material development:
Financial results meeting:June 28th, 2012
June 29th, 2012
June 28th, 2012
Yes
Yes (for analysts)(Amounts less than one million yen are rounded down)
1. Consolidated financial results for fiscal year ended March 2012 (April 1st, 2011 through March 31st, 2012)(1) Consolidated operating results (percentages represent increases or decreases from the previous year)
Net sales
Operating income
Ordinary income
Net income
million%million%million%million
%
yen
yen
yen
yen
Year ended
92,524
2.6
9,192
14.6
9,423
17.2
5,266
28.1
March 2012
Year ended
90,169
2.3
8,022
14.6
8,039
14.7
4,111
17.5
March 2011
(Note)Comprehensive income(The number with parenthesis shows negative figure)Fiscal year ended March 2012: 6,091 million yen / 69.1 %Year ended
March 2012
Year ended
March 2011

Net income per
share

Fully diluted
net income per
share

yen

yen

Fiscal year ended March 2011: 3,602 million yen / (20.2) %Ratio of net
income toshareholders’equity%Ratio ofordinary
income to total
assets%Ratio ofoperatingincome to net
sales%

311.84

-

6.9

9.0

9.9

228.66

-

5.4

7.8

8.9

(Reference) Profit or loss on equity method investments:
Fiscal year ended March 2012: (16) million yen
Fiscal year ended March 2011: - million yen(2) Consolidated financial position
million yen

million yen

Shareholders’ equity
ratio%

107,025

77,84672.7

4,866.46

103,056

75,62373.4

4,397.55

Total assets
Year ended
March 2012
Year ended
March 2011

Net assets(Reference) Shareholders’ equity:
Fiscal year ended March 2012: 77,846 million yen

Net assets per share
yen

Fiscal year ended March 2011: 75,623 million yen-1-(3) Consolidated cash flows statement
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

8,513(8,706)(3,512)

22,635

13,760(11,313)(4,038)26,348Year ended
March 2012
Year ended
March 2011
2. Dividends
End ofthefirstquarteryenYear ended
March 2011
Year ended
March 2012
Year ending
March 2013
(Forecast)

Annual Dividend
Ratio ofTotal
End of End of End of
Payout ratio dividends todividends
thethe
net assets
theAnnual (for the year) (consolidated) (consolidated)secondthird
term
quarter quarteryen
yen million yen
%
%

-

40.00

-

40.00

80.00

1,375

35.0

1.9

-

40.00

-

55.00

95.00

1,567

30.5

2.1

-

40.00

-

55.00

95.00

29.8

(Note)The detail of year-end dividend of Year ended March 2012; ordinary dividend 40.00 yen, extra dividend 15.00 yen
The detail of year-end dividend of Year ending March 2013 (Forecast); ordinary dividend 40.00 yen, extra dividend
15.00 yen

3. Forecast of consolidated financial results for fiscal year ending March 2013 (April 1st, 2012 throughMarch 31st, 2013)(Percentages represent increases or decreases from the previous year for the full-year figures)

millionyen%

millionyen%

millionyen%

millionyen%Netincomeper shareyen

94,000

1.6

9,400

2.3

9,400

(0.3)

5,100

(3.2)

318.82

Net sales

Full-year

Operating income

Ordinary income

Net income(Note)
Since the Group's operating results tend to take a peak at the fourth quarter and it is difficult to give aforecast every six months based on rational calculation, the consolidated forecast at the second quarter is
not disclosed.

-2-*Notes(1) Changes in significant subsidiaries during the current fiscal year: None
New: None
Exclusion: None
(2) Changes in accounting principles and procedures(i) Changes owing to adoption of revised accounting standards or such like: None(ii) Changes other than (i) above: None(iii) Changes in accounting projection: None(iv) Restatement: None
(3) Number of outstanding shares (common stock)(i) Number of outstanding shares at the year-end (including treasury stock)
Fiscal year ended March 2012: 19,588,000 sharesFiscal year ended March 2011: 19,588,000 shares(ii) Number of shares of treasury stock at the year-end:
Fiscal year ended March 2012: 3,591,515 sharesFiscal year ended March 2011: 2,391,355 shares(ⅲ) Average number of shares during the period
Fiscal year ended March 2012: 16,888,899 sharesFiscal year ended March 2011: 17,979,094 shares(Reference) Summary of non-consolidated financial results
1.Non-consolidated financial results for fiscal year ended March 2012 (April 1st, 2011 through March 31st,
2012)(1) Non-consolidated operating results

Year ended
March 2012
Year ended
March 2011

Net sales
millionyen(percentages represent increases or decreases from the previous year)
Operating income
Ordinary income
Net income%
million%million%million
%
yen
yen
yen

56,111

0.5

3,445

8.3

4,988

11.0

3,401

11.0

55,832

2.2

3,181

14.4

4,493

9.9

3,064

20.3

yen

Fully diluted net
income per shareyen

201.41-

170.45-

Net income per share
Year ended
March 2012
Year ended
March 2011

-3-

(2)

Non-consolidated financial position
Total assets

Net assets

Shareholders’ equity
ratio%

Net assets per share

million yen
million yen
yenYear ended
88,27957,881
65.6
3,618.41
March 2012
Year ended
86,30057,64566.8
3,352.16
March 2011
(Reference) Shareholders’ equity:
Fiscal year ended March 2012: 57,881 million yen Fiscal year ended March 2011: 57,645 million yen* Status of Auditing Processes
At the time of disclosure of this report, review procedures for the quarterly financial statements pursuant
to the Financial Instruments and Exchange Law had not been completed.
* Explanation about the 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 15th,
2012. 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 7-4-

Contents of the Attached Materials
1. Operating results------------------------------------------------------------------------------------------

7(1) Analysis of operation results--------------------------------------------------------------------------

7(2) Analysis of financial situation------------------------------------------------------------------------

9---------------------------------------------------------------------------------

10(4) Basic policies for profit distribution, and dividends for fiscal year ended March 2012 andfiscal year ending 2013-------------------------------------------------------------------------------

11(5) Business risks

11(3) Social action programs------------------------------------------------------------------------------------------

2. The Fukuda Denshi Group3. Management policy-------------------------------------------------------------------------------

13---------------------------------------------------------------------------------------

15(1) Basic policies for corporate management(2) Targeted management indices-----------------------------------------------------------

15-------------------------------------------------------------------------

15(3) Medium- to long-term management strategies(4) Issues to be addressed-----------------------------------------------------

15----------------------------------------------------------------------------------

16(5) Other important managerial matters of the Company-----------------------------------------------

16

4. Consolidated financial statements------------------------------------------------------------------------

17(1) Consolidated balance sheets-----------------------------------------------------------------------

17(2) Consolidated income statements (comprehensive) and consolidated statements ofcomprehensive income ------------------------------------------------------------------------------------

20(3) Consolidated statements of changes in net assets----------------------------------------------------

23----------------------------------------------------------------

26(5) Events or conditions that may cast significant doubt upon the entity’s ability to continue as agoing concern ---------------------------------------------------------------------------------------------

28(6) Basic significant matters regarding the preparation of consolidated financial statements -------

28(7) Additional information

32(4) Consolidated statements of cash flows----------------------------------------------------------------------------------(8) Notes to Consolidated Financial Statement(Consolidated balance sheets)----------------------------------------------------------

32-----------------------------------------------------------------------------

32(Consolidated statements of income)---------------------------------------------------------------------

33(Consolidated statements of comprehensive income)--------------------------------------------------

35(Consolidated statements of changes in net assets)-----------------------------------------------------

36-----------------------------------------------------------------

38(Lease transactions)-----------------------------------------------------------------------------------------

38(Financial Products)----------------------------------------------------------------------------------------

38---------------------------------------------------------------------------------------------------

38(Consolidated statements of cash flows)(Securities)(Derivative transactions)-----------------------------------------------------------------------------------

-5-

38

(Retirement benefits)---------------------------------------------------------------------------------------

39(Stock options, etc.)-----------------------------------------------------------------------------------------

40(Tax effect accounting)----------------------------------------------------------------------------------

40(Real estates including rentals)-------------------------------------------------------------------------

40(Segment information, etc.)-----------------------------------------------------------------------------

40(Transactions with related parties)---------------------------------------------------------------------

44---------------------------------------------------------------------------

44----------------------------------------------------------------------------------

44(Business combinations, etc.)(Per share information)(Significant subsequent events)------------------------------------------------------------------------

5. Non-consolidated financial statements(1) Balance sheets

44--------------------------------------------------------------

45----------------------------------------------------------------------------------------

45(2) Statements of income--------------------------------------------------------------------------------

49(3) Statements of changes in net assets ---------------------------------------------------------------------

53(4) Events or conditions that may cast significant doubt upon the entity's ability to continue as agoing concern-----------------------------------------------------------------------------------------

57(5) Significant accounting policies---------------------------------------------------------------------

57----------------------------------------------------------------------------------------------------

60

6. Others(1) Changes of directors---------------------------------------------------------------------------------

-6-

60

1. Operating results(1) Analysis of operation results(i) Overview of the business for the current consolidated fiscal year
Year ended
Year ended
Comparison with the previous year
March 2011
March 2012
Rate of change
AmountAmountChange(%)
Net sales
90,16992,5242,354
2.6(million yen)
Operating income
8,022
9,192
1,170
14.6
(million yen)
Ordinary income
8,039
9,423
1,384
17.2
(million yen)
Net income
4,111
5,266
1,155
28.1
(million yen)
Net income per share
228.66311.84
83.18
36.4
(yen)
During the fiscal year ended March 31st, 2012, the Japanese economy received a great impact from theGreat East Japan Earthquake which occurred on March 11th 2011. From then the efforts toward
restoration have been progressing gradually, such as employments and rise in stock prices. But on theother hand, appreciation of the yen, economic stagnation caused from the financial problems in Europe,
shows the future of our economy remaining uncertain.
In the medical environment industry, the remuneration for medical treatments will increase slightly
from April, but an effective and efficient reformed management is still required to go forward.
Under such severe economic circumstances, the Group came together and posted a consolidated net
sale of 92,524 million yen (up 2.6% year-on-year) for this consolidated fiscal year. With regard toincomes, consolidated operating income totaled 9,192 million yen (up 14.6% year-on-year) andconsolidated ordinary income totaled 9,423 million yen (up 17.2% year-on-year) and the net income
totaled 5,266 million yen (up 28.1% on a year-on-year basis).
(ii) Overview of each segment for the current consolidated fiscal year
Business segment

Physiologicaldiagnostic equipment
Patient monitoring
equipment
Medical treatment
equipment
Consumables and otherproducts
Total

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

Year ended March 2011

Year ended March 2012

Amount(millionyen)

Ratio (%)

Amount(millionyen)

Ratio (%)

25,661

28.5

26,837

29.0

1,176

4.6

8,010

8.9

8,741

9.5

731

9.1

36,77140.8

37,304

40.3

532

1.4

19,72721.8

19,641

21.2

(85)

(0.4)

90,169100.0

92,524

100.0

2,354

2.6

A. Physiological diagnostic equipment segment
In the fourth quarter, electrocardiographs and the introduction of new ultrasound diagnostic
systems increased the sales.
As a result, electrocardiographs, ultrasound diagnostic systems, blood cell counters, vascular
screening systems increased with consolidated net sales totaled of 26,837 million yen (up 4.6%
year-on-year).

-7-

B. Patient monitoring equipment segment
Patient monitoring equipment increased due to the recovery of capital investment of the hospitals.
In addition, the overseas sales have also expanded.
As a result, consolidated net sales totaled 8,741 million yen (up 9.1% year-on-year).
C. Medical treatment equipment segment
The business of renting medical equipment for home treatment and Automated External
Defibrillators (AEDs) continued to increase. The sales of pacemakers increased in the fourth
quarter but decreased in the total fiscal year, and also the sales of ventilators have decreased.
As a result, consolidated net sales totaled 37, 304 million yen (up 1.4% year-on-year).
D. Consumables and other products segment
In this segment, we mainly handle recording paper, disposable electrodes, and consumables used
for devices handled in the above segments, as well as maintenance and repair services.
Consolidated net sales for this segment were 19,641 million yen (down 0.4% year-on-year).
(iii) Outlook for fiscal year ending March 2013
Year ended
Year ending
March 2012
March 2013
AmountAmountComparison with the previous year
Rate of change(%)

ChangeNet sales(million yen)
Operating income(million yen)
Ordinary income(million yen)

92,52494,000

1,475

1.6

9,192

9,400

207

2.3

9,423

9,400

(23)

(0.3)

Net income(million yen)
Net income per share
(yen)

5,266

5,100

(166)

(3.2)

311.84318.82

6.98

2.2

The Japanese economy is starting to show signs of improvement, but issues such as the rising of crude
oil prices, prolonged appreciation of the yen and consumption tax hike has been a concern. In theoverseas, the impact of the economic stagnation in the United States and financial problems in Europe;
are a concern.
In the medical equipment institutions, remuneration for medical services positively changed, but on theother hand, the increase of medical expenses for elderly people is under review, furthermore, the shortageof doctors, closure of small and medium-sized hospitals; impoverishment of health care services are
becoming apparent. Due to the above, severe conditions are expected to continue.
Considering such circumstances, the Group expects consolidated net sales of 94,000 million yen,consolidated operating income of 9,400 million yen, consolidated ordinary income of 9,400 million yen,
and consolidated net income of 5,100 million yen for the fiscal year ending March 2013.
Forecast shown in this material are just an outlook judged or assumed based on the information available
at the moment, changes will be promptly disclosed when necessary.

-8-(2) Analysis of financial situation(i) Assets, liabilities and net assets
Total assets increased 3,969 million yen from the end of the previous fiscal year to reach 107,025
million yen. The main factors are the increase of 3,725 million yen in “notes and accounts
receivable-trade” and 1,361 million yen in “investment securities”, despite the decrease of 2,645
million yen in “cash and deposits”.
Total liabilities increased 1,746 million yen from the end of the previous fiscal year to reach 29,179
million yen. The main factors are the increase of 2,164 million yen in “Notes and accounts
payable-trade”, despite the decrease of 1,036 million yen in “Income taxes payable”.
Net assets increased 2,223 million yen from the end of the previous fiscal year to reach 77,846
million yen. The increase is primarily because of the increase of 3,885 million yen in ‘retained
earnings’ and 697 million yen in ‘valuation difference on available-for-sale securities’ at the end ofcurrent period, despite the increase of 2,532 million yen in “treasury stock”.
(ii) Consolidated cash flows
Year ended March
2011
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 March2012

Change13,7608,513(5,246)(11,313)(8,706)

2,607(4,038)(3,512)

526

(83)

(8)

74

(1,674)(3,713)(2,038)26,34822,635(3,713)(Cash flows from operating activities)
In the consolidated fiscal year, the cash flows from operating activities were 8,513 million yen, down
5,246 million yen from the previous year. Including ‘income before income taxes’ of 9,363 million yen,‘depreciation’ of 5,963 million yen and increase in ‘notes and accounts receivable-trade’ of 3,699
million yen.
(Cash flows from investing activities)
The cash flows from investing activities were minus 8,706 million yen, down 2,607 million yen fromthe previous year. Including increase of ‘time deposits’ amounted to 1,067 million yen, purchase of‘property, plant and equipment’ amounted to 5,203 million yen and purchase of ‘short-term and longterm investment securities’ amount of 2,977 million yen.
(Cash flows from financing activities)
The cash flows from financing activities were minus 3,512 million yen, up 526 million yen, mainly
because of the payment of ‘purchase of treasury stock’ of 2,954 million yen and the ‘cash dividends
paid’ of 1,371 million yen.
As a result, cash and cash equivalents at the end of the fiscal year was 22,635 million yen, down
3,713 million yen compared to the end of the previous fiscal year.

-9-(Reference) Trends in cash flow indicators
Year ended
Year ended
March 2008
March 2009
Shareholders’ equity
74.1
73.9
ratio (%)
Market value-based
47.2
36.4
shareholders’ equity
ratio (%)
Years needed to repay
0.6
0.2
debts
Interest coverage ratio

69.1

275.5

Year ended
March 2010

Year ended
March 2011

Year ended
March 2012

73.9

73.4

72.7

38.8

42.8

37.1

0.2

0.1

0.3

419.6

589.6

389.3

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) Social action programs
Since Fukuda Denshi was established, the Company has contributed significantly to improving 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 “Devotion to a social
mission and contributions to the advancement of medicine through the development of electronic medical
equipment”.
Immediately after the Great East Japan Earthquake occurred on March 11th, 2011, the Company began
to collect information on the status of lifelines, while confirming the safety of patients through partner
medical institutions and other medical institutions.
To contribute to medical assistance activities in the afflicted areas, the Company continues to provide
emergency mats, portable pulse oximeters, ventilators, patient monitors, AEDs along with supplies andconsumables used with these devices. Responding to the scheduled power outages, the Company
delivered replacement devices, spare oxygen tanks, and emergency batteries to patients cared for at home
based on instructions from their attending physicians.
Because medical institutions and patients were deeply concerned about possible shortages of electricity
supplies, the Company carried out energy-saving activities by visually monitoring the power consumption
at each office and production site.
To be more precise, the Company is continuing to implement measures in response to decreased theelectricity supplies by reducing lighting as much as possible, switching to energy-saving products,
restricting the use of air conditioners, partially restricting the use of office equipment, decreasing standby
power, installing glass film that insulates against external heat during the summer and prevents the releaseof internal heat in winter, and extending the Cool Biz period to two months, one month before and after
the previously recognized period.
In addition, the Company is continuing to support our employee’s volunteer activities since last June aspart of the reconstruction assistance activities for those affected by the Great East Japan Earthquake.

- 10 -

(4) Basic policies for profit distribution, and dividend for fiscal year ended March 2012 and fiscal year
ending 2013
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.
Year-end dividend of 55 yen per share (ordinary dividend 40.00 yen, extra dividend 15.00 yen) will be
paid for the fiscal year ended March 2012. For the fiscal year ending March 2013, annual dividend pershare is expected to be 95.00 yen per share, including interim.
(5) 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
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 Group 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) Effects to the group from the tremendous disaster
The Group has domestic and oversea bases; the impact to the business activities from the effect of
the earthquake and electric-power shortages raised concerns. These may affect the Group's operating
results and financial condition.

- 11 -

(vii) 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 14.00% of the Company’s voting
rights (as of March 31st, 2012). Kotaro Fukuda, director 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.

- 12 -

2. The Fukuda Denshi GroupThe Group consists of the company, 54 subsidiaries and 2 affiliates; 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- Consumables and other products 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- 13 -

Diagram of the Group’s business structure

Major customers
Japan

Overseas
Products andmerchandise

Products andmerchandise

Consolidated subsidiary
Fukuda Denshi USA,Inc.

RentalDomestic warehousemanagement andpacking/shipping

Consolidated subsidiary
Fukuda Denshi
Technology Service

Consolidated subsidiaries
Fukuda Logistics
CenterProducts andmerchandise

Entrustment of
warehousemanagement andpacking/shipping

Parts

Supply of materials

Repairs in Japan

Products and merchandise

Consolidated
subsidiary
Fukuda Life
Tech Co.,
Ltd.

Consolidated subsidiaryBeijing Fukuda
Denshi Medical
Instruments Co., Ltd.

Repairs

Products andmerchandise

Products and merchandise

RentalConsolidated
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

Physiological diagnostic
equipment segment
Supply of materials

Products and merchandise

Consolidated subsidiaries
Fukuda Denshi Hokkaido and other sales subsidiaries

Products

Consumables and otherproducts segment

Supply ofmaterials

Unconsolidated subsidiaries
ME Times
Miyagi Prefecture Medical Information ResearchCenterNiigata Medical Information Development Center
IVAC
Okusonic
Affiliated company accounted of equity method
Japan Stent Technology Co., Ltd.
Affiliated company not accounted of equity 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.

- 14 -

3. Management policy(1) Basic policies for corporate management
Since established in 1939, 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
consolidated net sales of 100,000 million yen or more, ratio of consolidated ordinary income toconsolidated net sales of 8% or more and a payout ratio of 30% or more by the fiscal year ending March
2016.
(3) Medium to long-term management strategies
As its medium-term goal, the Group aims to contribute to the progress of an aging society by
establishing business strategy based on the customer-first principle and building a strong management
structure with an efficient organizational operation management.
By continuously working on the Group’s issue and promoting innovation strategy based on the needs ofthe market, we aim to support the community healthcare and improve the quality and efficiency of
medical services, leading us to further development.
The basic management strategies for the new three-year medium term business plan starting from thefiscal year ending March 2013 are as follows:(i) Business strategies
Strategic investment to the field with high growth potential
Efficient and effective research and development by strengthening the cooperation between sales
department and development department
Promoting the expansion of businesses by domain; andImproving productivity with company-wide approach aiming for total optimization(ii) Sales strategies
Strengthening comprehensive support to acute care market and clinics; andStrengthening community-based support for homecare market;(iii) 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.

- 15 -

(iv) Increase of the corporate value
To establish a stable earnings structure and return profits to shareholders;
Actively address environmental issues; andContribute for the society through the development of electronic medical equipment, andenvironmental issues.
(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
Acquisition of treasury stock
At a meeting convened on November 14th, 2011 the Board of Directors issued a resolution regarding
acquisition of treasury stock and tender offer of treasury stock pursuant to the provisions of Article
156 of the Companies Act interpreted and applied on the basis of Article 165-3 of the said act andregarding the specific method of acquisition. From the following, we have carried out the acquisitionof treasury stock.
(i) Reason for acquiring treasury stock
The Company was contacted by Atomic Sangyo Co., Ltd., the Company's largest shareholder andits major shareholder, regarding its intention to sell a portion of its shareholdings.
Given this fact, the Company judged that it would be appropriate to purchase the shares for treasury
stock, considering the impact that would be exerted on the liquidity and market price of theCompany's common stock by a large number of shares being temporarily released on the market,
and from the standpoint of maintaining a stable composition of shareholders.
(ii) Details of board resolution (Board meeting held on November 14th, 2011)① Class of shares to be acquired: Common Stock② Number of shares to be acquired: Up to 1,400,000 shares③ Aggregate purchase price of shares: ¥2,954,000,000④ Period of acquisition: from November 15th, 2011 to January 31st, 2012(iii) Outline of tender offer① Number of shares to be acquired: Up to 1,400,000 shares② Tender offer price: ¥2,110 per shares③ Tender offer period: from November 15th, 2011 to December 13th, 2011(iv) Result of the tender offer① Number of tendered shares: 1,617,106 shares② Total acquisition cost: ¥2,954,000,000③ Settlement date: January 10th, 2012- 16 -

4. Consolidated financial statements(1) Consolidated balance sheets(Million yen)Previous fiscal yearst
(as of March 31 , 2011)

Current fiscal yearst
(as of March 31 , 2012)

AssetsCurrent assets
Cash and deposits

26,912

24,267*3

Notes and accounts receivable-trade22,572

Short-term investment securities

1,199

1,482

Merchandise and finished goods

5,897

6,624

40

142

Raw materials and supplies

1,386

1,455

Deferred tax assets

2,391

1,958

Other

1,228

1,370

Allowance for doubtful accounts

(54)

(36)

61,57463,562

8,794

8,886

Accumulated depreciation and impairment loss

(5,126)(5,342)

Buildings and structures, net

3,668

3,544

Machinery, equipment and vehicles

528

686

Accumulated depreciation and impairment loss

(357)

(467)

Machinery, equipment and vehicles, net

170

218

24,54925,105(14,716)(16,444)

9,833

8,660

5,883

6,650

265

315

Accumulated depreciation and impairment loss

(134)

(178)

Lease assets, net

131

137

0

904

19,687

20,117

1,746

1,378

Work in process

Total current assets

26,297

Noncurrent assets
Property, plant and equipment
Buildings and structures

Tools, furniture and fixtures
Accumulated depreciation and impairment loss
Tools, furniture and fixtures, net
Land
Lease assets

Construction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets*1

Investment securities
Deferred tax assets

7,222
3,319

- 17 -

*1

8,583
2,572

Previous fiscal yearst
(as of March 31 , 2011)

Current fiscal yearst
(as of March 31 , 2012)

Other

9,845

10,853

Allowance for doubtful accounts

(21)

(24)

Allowance for investment loss

(318)

(18)

Total investments and other assets

20,047

21,96741,481

43,463103,056

107,025

Total noncurrent assets
Deferred assets- 18 -

(Million yen)Previous fiscal yearst
(as of March 31 , 2011)

Current fiscal yearst
(as of March 31 , 2012)

Notes and accounts payable-trade

12,76014,925

Short-term loans payable

1,400

1,700

68

79

Income taxes payable

2,383

1,347

Provision for bonuses

2,185

2,171

Provision for directors' bonuses

145

139

Provision for product warranties

386

484

Provision for loss on disaster

157

－

Other

2,949

3,422

Total current liabilities

22,437

24,270Long-term loans payable

620

742

Lease obligations

131

115

3,158

2,917

Provision for directors' retirement benefits

184

185

Other

901

948

4,995

4,909

27,43329,179

Capital stock

4,621

4,621

Capital surplus

9,982

10,027Retained earnings

66,30370,189Treasury stock(5,047)(7,580)Total shareholders' equity

75,85977,257

Valuation difference on available-for-sale securities

(57)

640

Foreign currency translation adjustment

(179)

(51)

Total accumulated other comprehensive income

(236)

588

75,623

77,846103,056

107,025

Liabilities
Current liabilities

Lease obligations

Noncurrent liabilities

Provision for retirement benefits

Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income

Total net assets
Total liabilities and net assets- 19 -

(2) Consolidated income statements (comprehensive) and consolidated statements of comprehensive
income(Million yen)Previous fiscal yearst

Current fiscal year

st

st

st

(April 1 , 2010 to March 31 , 2011)(April 1 , 2011 to March 31 , 2012)

90,16992,524

Net sales*1

Cost of sales
Gross profit

48,311*1

41,857*2 *3

Selling, general and administrative expenses
Operating income

33,83549,07143,452*2 *3

34,260

8,022

9,192

Interest income

39

71

Dividends income

124

126

Compensation income

－

66

Other

191

157

Total non-operating income

355

422

Interest expenses

23

21

Foreign exchange losses

119

26

Provision of allowance for investment loss

66－

Equity in losses of affiliates－

16

Loss on investments in partnership

104

90

Other

24

35

Total non-operating expenses

338

190

8,039

9,423

*4

*4

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income
Gain on sales of noncurrent assets

2

4Gain on sales of investment securities

63

4

Reversal of allowance for doubtful accounts

152-

Surrender value of insurance

198

373

Other

15

9

Total extraordinary income

433

392

*5

*5

Extraordinary loss
Loss on sales of noncurrent assets*6

Loss on retirement of noncurrent assets*7

Impairment loss

7

－

14
245

0

*6

38

Loss on valuation of investment securities

8

307

Loss on valuation of golf club membership1

1- 20 -

(Million yen)Previous fiscal yearst

Current fiscal year

st

st

st

(April 1 , 2010 to March 31 , 2011)(April 1 , 2011 to March 31 , 2012)21－

Loss on adjustment for changes of accounting
standard for asset retirement obligations*8

Loss on disaster
Other

490

*7

61

4

42

792

452

Income before income taxes and minority
interests

7,679

9,363

Income taxes-current

3,764

3,301

Income taxes-deferred

(195)

795

Total income taxes

3,568

4,096

Income before minority interests

4,111

5,266

Net income

4,111

5,266

Total extraordinary losses- 21 -

Consolidated statements of comprehensive income(Million yen)Previous fiscal yearst

Current fiscal year

st

st

st

(April 1 , 2010 to March 31 , 2011)(April 1 , 2011 to March 31 , 2012)

4,111

5,266

Valuation difference on available-for-salesecurities

(468)

697

Foreign currency translation adjustment(39)

Income before minority interests
Other comprehensive income

Total other comprehensive income

(508)

127
*1

825

Comprehensive income

3,602

6,091

Comprehensive income attributable toComprehensive income attributable to ownersof the parent

3,602

6,091

- 22 -

(3) Consolidated statements of changes in net assets(Million yen)Previous fiscal yearst

Current fiscal year

stst

(April 1 , 2010 to March 31 , 2011)st(April 1 , 2011 to March 31 , 2012)

Shareholders' equity
Capital stock
Balance at the beginning of current
period

4,621

4,621

Total changes of items during theperiod－－Balance at the end of current period

4,621

4,621

9,982

9,982

Disposal of treasury stock

(0)

45

Total changes of items during theperiod(0)45Balance at the end of current period

9,982

10,027

63,67466,303(1,477)(1,375)(4)(5)

Net income

4,111

5,266

Total changes of items during theperiod

2,628

3,885

Balance at the end of current period

66,30370,189(2,501)(5,047)Purchase of treasury stock(2,547)(2,954)

Disposal of treasury stock0422

Total changes of items during theperiod(2,546)(2,532)

Balance at the end of current period(5,047)(7,580)75,77775,859(1,477)(1,375)(4)(5)

Changes of items during the period

Capital surplus
Balance at the beginning of current
periodChanges of items during the period

Retained earnings
Balance at the beginning of current
periodChanges of items during the period
Dividends from surplus
Employees' bonuses and welfare funds

Treasury stock
Balance at the beginning of current
periodChanges of items during the period

Total shareholders' equity
Balance at the beginning of current
periodChanges of items during the period
Dividends from surplus
Employees' bonuses and welfare funds- 23 -

(Million yen)Previous fiscal yearst

Current fiscal year

stst

(April 1 , 2010 to March 31 , 2011)st(April 1 , 2011 to March 31 , 2012)

4,111

5,266

Purchase of treasury stock(2,547)(2,954)

Disposal of treasury stock0467

Total changes of items during theperiod82

1,398Balance at the end of current period

75,85977,257

411

(57)

(468)

697

(468)

697

(57)

640

(139)

(179)

(39)

127

(39)

127

(179)

(51)

272

(236)

(508)

825

(508)

825

(236)

588

76,04975,623(1,477)(1,375)

(4)

(5)

4,111

5,266

(2,547)(2,954)

Net income

Accumulated other comprehensive income
Valuation difference on
available-for-sale securities
Balance at the beginning of current
periodChanges of items during the period
Net changes of items other thanshareholders' equity
Total changes of items during theperiodBalance at the end of current period
Foreign currency translation adjustment
Balance at the beginning of current
periodChanges of items during the period
Net changes of items other thanshareholders' equity
Total changes of items during theperiodBalance at the end of current period
Total accumulated other comprehensive
incomeBalance at the beginning of current
periodChanges of items during the period
Net changes of items other thanshareholders' equity
Total changes of items during theperiodBalance at the end of current period
Total net assets
Balance at the beginning of current
periodChanges of items during the period
Dividends from surplus
Employees' bonuses and welfare funds
Net income
Purchase of treasury stock- 24 -

(Million yen)Previous fiscal yearst

Current fiscal year

stst

(April 1 , 2010 to March 31 , 2011)

Disposal of treasury stock
Net changes of items other thanshareholders' equity
Total changes of items during theperiodBalance at the end of current periodst(April 1 , 2011 to March 31 , 2012)

0

467

(508)

825

(426)

2,223

75,623

77,846Note 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.

- 25 -

(4) Consolidated statements of cash flows(Million yen)
Current fiscal year

Previous fiscal year
st

st

st

(April 1 , 2010 to March 31 , 2011)

Net cash provided by (used in) operating
activities
Income before income taxes and minority
interests

st(April 1 , 2011 to March 31 , 2012)

7,679

9,363

5,978

5,963

Impairment loss

245

38

Loss on disaster

490

61

66

(300)

(154)

(15)

533

(18)

27

(6)

83

97

(238)

(240)

10

0

(164)

(198)

Interest expenses

23

21

Loss (gain) on sales of noncurrent assets

4(4)Loss on retirement of noncurrent assets

14

－

(63)

(4)

8

307

(198)

(373)

Equity in (earnings) losses of affiliates－

16

Decrease (increase) in notes and accounts
receivable-trade

1,456(3,699)Decrease (increase) in inventories

1,180

(852)

(883)

2,183

79

(33)

Other, net

371

574

Subtotal

16,54912,881

Interest and dividends income received

152

184

Interest expenses paid

(23)

(21)

Payments for loss on disaster

(35)

(217)

(2,882)(4,312)

Depreciation and amortization

Increase (decrease) in allowance forinvestment loss
Increase (decrease) in allowance for
doubtful accounts
Increase (decrease) in provision forbonuses
Increase (decrease) in provision for
directors' bonuses
Increase (decrease) in provision for productwarranties
Increase (decrease) in provision for
retirement benefits
Increase (decrease) in provision for
directors' retirement benefits
Interest and dividends income

Loss (gain) on sales of investment
securities
Loss (gain) on valuation of investment
securities
Loss (gain) on cancellation of insurance
contract

Increase (decrease) in notes and accounts
payable-trade
Increase (decrease) in accrued consumption
taxes

Income taxes paid

- 26 -

(Million yen)
Current fiscal year

Previous fiscal year
st

st

st

(April 1 , 2010 to March 31 , 2011)

Net cash provided by (used in) operating
activities
Net cash provided by (used in) investing
activities

st(April 1 , 2011 to March 31 , 2012)

13,7608,513

Decrease (increase) in time deposits(4,057)(1,067)Purchase of property, plant and equipment(5,262)(5,203)

(311)

(535)

(2,307)(2,977)

1,587

1,704

(1,206)(1,419)Proceeds from maturity of insurance funds

437

827

Payments of loans receivable

(120)

(132)

Other, net

(72)

97

(11,313)(8,706)

(500)

300

Proceeds from long-term loans payable

620

121

Repayment of long-term loans payable

(50)

－

(2,548)(2,954)0466(1,477)(1,371)

(83)

(74)

(4,038)(3,512)(83)(8)(1,674)(3,713)28,023

26,34826,34822,635Purchase of intangible assets
Purchase of short-term and long term
investment securities
Proceeds from sales of short-term and longterm investment securities
Purchase of insurance funds

Net cash provided by (used in) investing
activities
Net cash provided by (used in) financing
activities
Net increase (decrease) in short-term loans
payablePurchase of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid
Repayments of lease obligations
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodCash and cash equivalents at end of period- 27 -

(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
Current fiscal year
(April 1st, 2011 to March 31st, 2012)
1. Scope of consolidation

2. Application of equity method

3. Accounting period, etc. of
consolidated subsidiaries

4. Accounting standards(1) Valuation standards andmethods for principle assets(1) Number of consolidated subsidiaries: 49
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 othercompanies 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 tothe owned interest) had no material effect on the consolidated
financial statements.
(1) Number of affiliated companies accounted for by equity
method : 1
Japan Stent Technology Co., Ltd.
From this current fiscal year Japan Stent Technology Co., Ltd.
is included to the affiliated company accounted for by theequity-method.
(2) Names and other details of unconsolidated subsidiaries andaffiliates that are not accounted for by equity method
The five unconsolidated subsidiaries and the affiliatecompany Fukuda Pulmo had no material effect on consolidated
income and loss and retained earnings, and they were notimportant as a whole in terms of material influence on the
consolidated interim financial statements. Accordingly, we did
not apply equity method accounting to them.
The accounts of consolidated subsidiaries Fukuda Denshi
USA, Inc.; and Fukuda Denshi Switzerland AG close on
December 31 of each year. In the preparation of consolidated
financial statements, consolidated subsidiaries’ financial
statements as of the said date were used, and with respect tosignificant transactions that occurred between the said date
and the consolidated book-closing, adjustments necessary forconsolidation are made.
(i) Securities
Held-to-maturity securities- Amortized cost method
Other securities
Marketable securities- Stated at fair value based on the market price as of the end of
this fiscal year.
(Unrealized holding gains or losses are reported in a componentof net assets, while the cost of securities sold is calculated by themoving average method.)- 28 -

Current fiscal year
(April 1st, 2011 to March 31st, 2012)(ii) Inventories
The cost method (the amounts stated in the balance sheets arecalculated by writing down the book values based on lower
profitability) is used as a valuation standard.
Merchandise and finished goods-Mainly stated at cost determined by the first-in, first-out
method.
Work in process-Mainly stated at cost based on the specific cost method.
Raw materials-Mainly stated at cost based on the gross average method.
Supplies-Stated at cost based on the last purchase price method.

(2) Depreciation method forsignificant depreciable assets(i) Property, plant and equipment (excluding lease assets)
Depreciated primarily by the declining balance method.
However, buildings (except for building attachments) acquiredon or after April 1, 1998 were depreciated using the straight-line
method.
In addition, the expected lifetime are as follows:
Buildings and structures: 3 to 60 years
Machinery and delivery equipment: 4 to 17 years
Tools, instruments and fixture: 2 to 20 years
Assets with an acquisition cost of 100,000 yen or more but lessthan 200,000 yen were evenly amortized over a three-year
period.
Of the tools, instruments and fixtures, the oxygen concentrator
devices (assets for rental) were depreciated using thestraight-line method with the estimated rental period (four years)
used as the number of depreciation years.

- 29 -

Current fiscal year
(April 1st, 2011 to March 31st, 2012)(ii) Intangible assets (excluding lease assets)
Depreciated by the straight-line method.
Software for internal use is amortized by the straight-line
method over its useful life of five years.
As for software for sale in the market, the Company records
the larger of an amortization based on projected sales volume
for the effective sales period (no longer than three years) or a
uniform amortization over the effective remaining sales period.
(iii) Lease assets
Lease assets in finance lease transactions
We adopted the same depreciation method applied toself-owned fixed assets.
Lease assets in finance lease transactions that do not transfer
ownership
The straight-line method is used, based on the assumption thatthe useful life is the lease term and the residual value is zero.
Finance lease transactions that do not transfer ownership andfor which the inception of the lease predates March 31, 2008
continue to be accounted for in a similar manner with theordinary rental transactions.
(3) Basis for provision of allowances (i) Allowance for doubtful accounts
To prepare for losses incurred by bad debts, the amount ofpotential loss is calculated by using the historical loss ratio in
the case of general loans or receivables. Potential loss for
specific loans or receivables, for which we have concerns
regarding their collectability, is calculated by assessing thepossibility of collection for each individual account.
(ii) Provision for bonuses
To prepare for the payment of bonuses to employees, anamount corresponding to this fiscal year’s portion of estimatedbonus payments was reserved.
(iii) Provision for directors' bonuses
To prepare for the payment of bonuses to directors andcorporate auditors, an amount corresponding to this fiscal
year’s portion of estimated bonus payments was reserved.

- 30 -

Current fiscal year
(April 1st, 2011 to March 31st, 2012)(iv) Provision for retirement benefits
To prepare for the payment of retirement benefits for
employees, the amount recognized as accruing at the end 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 a certain number of years (10 years), which areless than the average remaining years of service of theemployees when they incurred.
Actuarial differences are amortized, using the straight-line
basis over a certain number of years (10 years), which are lessthan the average remaining years of service of the employees
when they incurred, from the fiscal year after the one in which
they arise.
(v) Provision for directors' retirement benefits
To prepare for the payment of retirement benefits to directors
and corporate auditors, some consolidated subsidiaries reserve
the estimated amount to be paid at the end of the fiscal year, in
accordance with the internal regulations.
(vi) Provision for product warranties
To prepare for the expenses incurred by the free repair to be
implemented after the delivery of the products, estimatedamount of the repair expenses was reserved on the basis of theestimated proportion of such expenses to net sales and theestimated amount of such expenses for individual products.
(4) Standards for translation ofimportant foreign
currency-based assets or
liabilities into Japanese yen

Monetary credits and debts denominated in foreign currencies
are translated into yen based on the current exchange rates atthe end of each fiscal year. Differences arising from suchtranslation are stated as profits or losses. Assets, liabilities,
revenue and expenses of overseas subsidiaries, and otherfinancial items are translated into yen based on the current
exchange rates at the end of each fiscal year. The resulting
differences are recorded as Foreign currency translation
adjustment account and Minority interests, under Net assets.

(5) Cash in consolidated cash flow
statements

Cash (cash and cash equivalents) in the consolidated
statements of cash flows consists of cash on hand,readily-available deposits, and short-term investments with amaturity not exceeding three months at the time of purchasethat are readily convertible to cash and not exposed tosignificant risk in value fluctuations.
Accounting treatment of consumption tax and other taxes
Consumption tax and other taxes are excluded from profits
and losses.

(6) Other important matters for
preparation of consolidated
financial statements- 31 -

(7) Additional information
Current fiscal year
(April 1st, 2011 to March 31st, 2012)（Accounting Standard for Accounting Changes and Error Corrections）
From the beginning of the current fiscal year, for our accounting changes and error corrections, the"Accounting Standard for Accounting Changes and Error Corrections" (ASBJ Statement No.24 announced onthDecember 4 , 2009) and the "Guidance on Accounting Standard for Accounting Changes and ErrorthCorrections" (ASBJ Guidance No.24 announced on December 4 , 2009) has been applied.
（Accounting for the disposal of treasury stock for Stock Benefit Trust (J-ESOP)）th
At the meeting convened on November 14 , 2011 the Board of Directors issued a resolution regarding the
introduction of “Stock Benefit Trust (J-ESOP)” (hereinafter “the Plan”).
The Plan provides Company shares to employees who meet certain conditions based on previously
established equity benefits regulations. It is to strengthen and more closely link the performance of ourcompensation and stock price, and to raise awareness of our employees to collaborate with the Group's profit.
This effect should increase productivity and improve our employees’ morale and further improve the Group's
medium-to long-term corporate value mostly based on domestic sales offices.
With the introduction of the Plan, we disposed 50,000 shares of our treasury stock to Trust & CustodyndServices Bank, Ltd. (hereinafter “Trust Account”), dated in 2 March, 2012.
Accounting for the disposal of treasury stock related to the Plan, we have focused on the accounting
treatment from the viewpoint of economic reality, the shares, assets, liabilities, costs, revenues, which related
to the Trust Account are included on our balance sheets and statements of income.
st
As of March 31 , 2012, according to the purpose, the 50,000 shares which the Trust Account own, areincluded in the number of our treasury stock.

(8) Notes from Consolidated Financial Statement(Consolidated balance sheets)
Previous fiscal year
(as of March 31st, 2011)*1. Notes to unconsolidated subsidiaries andaffiliated companies
Unconsolidated subsidiaries and affiliatedcompanies:
Investment securities:
64 million yen(Stocks)

Current fiscal year
(as of March 31st, 2012)*1. Notes to unconsolidated subsidiaries andaffiliated companies
Unconsolidated subsidiaries and affiliatedcompanies:
Investment securities:
664 million yen(Stocks)*2. Discount on bills:(Discount on export bills)*2. Discount on bills:(Discount on export bills)

92 million yen

54 million yen*3. Accounting for matured notes is based on thedate when the notes have been exchanged. In
addition, since the last day for the consolidated
financial accounting fiscal year was a Bank
holiday, the next amounts of matured notes areincluded in this Consolidated Balance Sheets.
Notes receivable-trade:- 32 -

310 million yen

(Consolidated statements of income)Previous fiscal year
Current fiscal year
(April 1st, 2010 to March 31st, 2011)(April 1st, 2011 to March 31st, 2012)*1. The year-end inventory balance is the amount*1. The year-end inventory balance is the amountafter the devaluation of the book value arising
after the devaluation of the book value arisingfrom the decline in profitability, and the next
from the decline in profitability, and the next
loss on valuation of inventories is included inloss on valuation of inventories is included incost of sales.
446 million yen
cost of sales.
13 million yen*2. Major items and amounts of selling, general*2. Major items and amounts of selling, generaland administrative expenses are as follows:
and administrative expenses are as follows:
Salaries, allowance, and other monies for
Salaries, allowance, and other monies for
directors and employees: 11,867 million yen
directors and employees: 12,140 million yen
Bonuses and provision of allowance for
Bonuses and provision of allowance forbonuses:
2,996 million yen
bonuses:
3,193 million yen
Provision of allowance for retirement benefits
Provision of allowance for retirement benefits
to directors:
32 million yen
to directors:
38 million yen
Retirement benefit expenses: 655 million yen
Retirement benefit expenses: 720 million yen
Depreciation:
1,508 million yen
Depreciation:
1,471 million yen
Provision of allowance for bonuses to directors:
Provision of allowance for bonuses to directors:
145 million yen
130 million yen*3. Research and development expenses includedin the General and administrative expenses andManufacturing expenses for this fiscal year are
3,216 million yen.

*3. Research and development expenses includedin the General and administrative expenses andManufacturing expenses for this fiscal year are
3,332 million yen.

*4 Breakdown of Gains on sale of fixed assets
Machinery and delivery equipment:
1 million yen
Tools, instruments and fixtures: 1 million yen
Total
2 million yen*5. Breakdown of Losses on sale of fixed assets
Machinery and delivery equipment:
1 million yen
Tools, instruments and fixtures: 5 million yen
Total
7 million yen*4 Breakdown of Gains on sale of fixed assets
Machinery and delivery equipment:
3 million yen
Tools, instruments and fixtures: 1 million yen
Total
4 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
assetsBuildings and structures:
3 million yen
Machinery and delivery equipment:
1 million yen
Tools, instruments and fixtures: 9 million yen
Intangible fixed assets:
0 million yen
Total
14 million yen- 33 -＿

Previous fiscal year
(April 1st, 2010 to March 31st, 2011)*7. Impairment losses
The Company groups its operations by businesssegment, and consolidated subsidiaries form
their grouping with each company or office as
one unit. Impairment losses on leased realestate and idle assets are recognized separately.
Because of a decrease in cash flows caused by adeclined 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 245 million yen), whichwere booked as extraordinary losses.
These impairment losses consist of the losses onbuildings and structures of 192 million, on land
property of 49 million yen, on tools, instruments
and fixtures of 2 million yen.
The recoverable value was assessed according
to the net sale value, and the market prices were
evaluated according to roadside land prices orthe assessed value of fixed asset tax, withreasonable adjustments.
Use ofassetsLocation ofassetsType ofassetsOperational
assetsTagajo,MiyagiPrefecture
Tagajo,MiyagiPrefecture
SapporoCity,
Hokkaido

Buildings andstructures

192

Land
property49

Operational
assetsOperational
assetsTools,
instruments
and fixtures

Current fiscal year
(April 1st, 2011 to March 31st, 2012)*6. Impairment losses
The Company groups its operations by businesssegment, and consolidated subsidiaries form
their grouping with each company or office as
one unit. Impairment losses on leased realestate and idle assets are recognized separately.
Because of a decrease in cash flows caused by adeclined 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 38 million yen), whichwere booked as extraordinary losses.
These impairment losses consist of the losses ontools, instruments and fixtures of 12 million
yen, on land property of 17 million yen, and onother assets of 8 million yen.
The recoverable value was assessed according
to the net sale value, and the market prices were
evaluated according to roadside land prices orthe assessed value of fixed asset tax, withreasonable adjustments.
Use ofassetsLocation ofassetsType ofassetsOperational
assetsBunkyo-ku,
Tokyo

Idle assets

Nasu,
Tochigi
Prefecture

Tools,
instruments
and fixturesLand
property

Amount(millionyen)

Amount(million
yen)
21

17

2

*8.Losses from disaster is the loss from the Great
East Japan Earthquake which occurred in March
2011. Please check the details below. Loss fromdisaster includes the amount for provision for loss
on disaster of 157 million yen.

*7.Losses from disaster is the loss from the Great
East Japan Earthquake which occurred in March
2011.

Provision for credit losses and allowance for
doubtful accounts: 7 million yen
Equipment removal and repair costs:
31 million yen
Losses on inventory valuation: 89 million yen
Losses on asset valuation:
211 million yen
Relief money and supplies:
58 million yen
Other:
91 million yen
Total
490 million yen- 34 -

Production transfer,development cost for replacements,and others:
61 million yen
Total
61 million yen

（Consolidated statements of comprehensive income)Current fiscal year

（April 1st, 2011 to March 31st 2012）*1 Amount of Reclassification adjustments and Tax effects for Other comprehensive income
Valuation difference on
million yen
available-for-sale securities：
Amount incurred in current fiscal
832
year
Amount of Reclassification249
adjustments
Before adjusting tax benefit
1,082
Amount of tax benefit(384)
Valuation difference on
available-for-sale securities
Foreign currency translation
adjustment：
Amount incurred in current fiscal
year
Other comprehensive income

697

127
825

- 35 -

(Consolidated statements of changes in net assets)
Previous fiscal year (from April 1st, 2010 to March 31st, 2011)
1. Type and total number of issued shares and type and number of shares of treasury stock
Increase in number
Decrease in
Number of shares
Number of sharesof shares fornumber of sharesat the end of theat the beginning ofprevious fiscal
for previous fiscal
previous fiscal
previous fiscal year
year
year
year
(1,000 shares)(1,000 shares)(1,000 shares)(1,000 shares)
Number ofissued shares
Common stock
19,58819,588
Total
19,58819,588Treasury stock
Common stock
1,119
1,271
0
2,391
(Note)
Total
1,119
1,271
0
2,391
Note: The increase of 1,271 thousand shares in treasury stock of common stock reflects the increase of
1,271 thousand shares and 0 thousand shares owing to the acquisition of treasury stock andrepurchase of 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 General
Meeting of
Shareholders heldon June 29th, 2010
Board ofDirectors’ meeting
held on October
29th, 2010

Type of shares

Total dividend
amount(million yen)

Dividends
per share(in yen)Record date

Effective dateCommon
stock

738

40

March 31st,2010

June 30th,
2010

Common
stock

738

40

September
30th, 2010

December 6th,
2010(2) Of the dividends whose record date belongs to the current fiscal year, and those whose effective dateof the dividends will be in the next fiscal year
Total
Dividends
Type of
Source fordividend(Resolution)
pershare (inRecord dateamountsharesdividends
yen)(million yen)
Ordinary General
Meeting ofCommonRetained
March 31st,687
40
Shareholders held onstockearnings
2011
June 29th, 2011- 36 -

Effective
date
June 30th,2011Current fiscal year (from April 1st, 2011 to March 31st, 2012)
1. Type and total number of issued shares and type and number of shares of treasury stock
Increase in number
Decrease in
Number of shares
Number of sharesof shares fornumber of sharesat the beginning ofat the end of thecurrent fiscal year
for current fiscal
current fiscal year
current fiscal year
under
year
(1,000 shares)(1,000 shares)(1,000 shares)(1,000 shares)
Number ofissued shares
Common stock
19,58819,588
Total
19,58819,588Treasury stock
Common stock
2,391
1,400
200
3,591
(Note)
Total
2,391
1,400
200
3,591
th
Note: (i) At the meeting convened on November 14 , 2011 the Board of Directors issued a resolution
regarding the introduction of “Stock Benefit Trust (J-ESOP)” (hereinafter “the Plan”). With
the introduction of the Plan, we disposed 50 thousand shares of our treasury stock to Trust &Custody Services Bank, Ltd. (hereinafter “Trust Account”), dated in 2nd March, 2012. As of
March 31st, 2012, according to the purpose, the 50,000 shares which the Trust Account own,
are included in the number of our treasury stock.
(ii) The increase of 1,400 thousand shares in treasury stock of common stock reflects the increaseof 1,400 thousand shares of tender offer of treasury stock, and 0 thousand shares owing to theacquisition of treasury stock.
(iii) The decrease of 200 thousand shares in treasury stock of common stock reflects the disposalby third-party allotment.
2. Stock acquisition rights and treasury stock acquisition rights
Not applicable.
3. Dividends(1) Dividend payment amount(Resolution)
Ordinary General
Meeting of
Shareholders heldon June 29th, 2011
Board ofDirectors’ meeting
held on October
31st, 2011

Total dividend
amount(million yen)

Dividends per
share(in yen)Record date

Effective dateCommon
stock

687

40

March 31st,
2011

June 30th,
2011

Common
stock

687

40

September
30th, 2011

December 5th,
2011

Type of shares(2) Of the dividends whose record date belongs to the current fiscal year, and those whose effective dateof the dividends will be in the next fiscal year
Total
Dividends
Type of
Source fordividend(Resolution)
pershare (inRecord dateamountsharesdividends
yen)(million yen)
Ordinary General
Meeting ofCommonRetained
March 31st,879
55
Shareholders held onstockearnings
2012
June 28th, 2012

- 37 -

Effective
date
June 29th,2012

(Note): With the introduction of “Stock Benefit Trust (J-ESOP)”, the 50 thousand shares Trust & Custody
Services Bank, Ltd. owns are included in the number of our treasury stock. According to the accounting,
200 million yen are excluded from the total amount of dividend calculation.

(Consolidated statements of cash flows)
Previous fiscal year
(April 1st, 2010 to March 31st, 2011)
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 31st, 2011)
Cash and deposits:
26,912 million
yenTime deposits with a deposit(564) million
period of over three months:
yenCash and cash equivalents:
26,348 millionyen
2. Details of important non-fund transactions
The amounts of assets and liabilities in financelease transactions which are newly recognized forthe previous fiscal year are 21 million yen each.

Current fiscal year
(April 1st, 2011 to March 31st, 2012)
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 31st, 2012)
Cash and deposits:
24,267 million
yenTime deposits with a deposit(1,631) million
period of over three months:
yenCash and cash equivalents:
22,635 millionyen
2. Details of important non-fund transactions
The amounts of assets and liabilities in financelease transactions which are newly recognized forthe current fiscal year are 67 million yen each.

(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 1st, 2010 to March 31st, 2011) and current fiscal year (from April 1st,
2011 to March 31st, 2012):
There are no applicable items, as the Group did not use derivative transactions.

- 38 -

(Retirement benefits)
1. Description of retirement benefit plans adopted.
The Group have defined the benefit plans, as defined benefit corporate pension plan and lump-sum
retirement allowance.
2. Retirement benefit obligations
Previous fiscal year
(April 1st, 2010 to(million yen) March 31st, 2011)(9,803)Current fiscal year
(April 1st, 2011 toMarch 31st, 2012)(11,189)(1)

Retirement benefit obligations(2)

Plan assets at fair value

6,160

6,908

(3)

Unfunded retirement benefit obligations (1) + (2)(3,643)(4,280)(4)

Unrecognized actuarial gain or loss
Unrecognized prior service cost
(Reduction of the liabilities)
Accrued retirement benefits (3) + (4) + (5)

528

1,397

(44)

(34)

(3,158)(2,917)(5)(6)(Note): 1 consolidated subsidiary use the simplified method in calculating the retirement benefit
obligation.
3. Retirement benefit expenses(million yen)Previous fiscal year
(April 1st, 2010 toMarch 31st, 2011)

Current fiscal year
(April 1st, 2011 toMarch 31st, 2012)Retirement benefit expenses

828

862

(1) Service cost

673

690

(2) Interest cost

187

195

(3) Expected return on plan assets (decrease)

(112)

(123)

(4) Amortization of actuarial gain or loss

90

108

(5) Amortization of prior service cost

(11)

(9)

(Note): Retirement benefit expenses of consolidated subsidiaries that use a simplified method are stated inservice cost.
4. Items related to basis of calculation of retirement benefit obligations
Previous fiscal year
(April 1st, 2010 toMarch 31st, 2011)
Straight-line(1) Periodic allocation method for projected benefits
standard(2) Discount rates (%)2.00(3) Expected return on assets (%)2.00(4) Years over which actuarial gain or loss is amortized(years)(5) Years over which prior service cost is amortized(years)- 39 -

10
10

Current fiscal year
(April 1st, 2011 toMarch 31st, 2012)Same as on the
left
1.10
Same as on theleft
Same as on theleft
Same as on theleft(Stock options, etc.)
Previous fiscal year (from April 1st, 2011 to March 31st, 2012):
Not applicable.
Current fiscal year (from April 1st, 2011 to March 31st, 2012):
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, etc)
a. Segment information(i) Previous fiscal year (from April 1st, 2010 to March 31st, 2011)
1. Reportable Segments
The reportable segments of the Fukuda Denshi Group are the constituent units of the Company forwhich separate financial information can be obtained, and they are the subject of regularexaminations by the Board of Directors aimed at helping the board to decide the allocation ofmanagement resources and evaluate the performance of the Group.
The Company has set up divisions for each product and service in the corporate headquarters, andeach of the divisions formulates comprehensive strategies for the product or service it handles, anddevelops its own business activities.
We have 4 reportable segments based on our headquarter divisions which are physiologicaldiagnostic equipment segment, patient monitoring equipment segment, medical treatment equipment
segment, and consumables and other products segment.
In the physiological diagnostic equipment segment, we mainly handle electrocardiographs,
ultrasound diagnostic imaging systems and blood cell counters. In the patient monitoring equipment
segment, we handle patient monitors. In the medical treatment equipment segment, we mainly
handle defibrillators, ventilators, pacemakers, catheters, and business of renting medical equipment
for home treatment. In the consumables and other products segment, we mainly handle consumables
used for devices handled by the above segments, as well as maintenance and repair services.
2. Methods to calculate the sales, gains (or losses), assets, liabilities and other numbers of thereportable segments
The accounting policies for the reportable segments are basically the same as those described in“Basic significant matters regarding the preparation of consolidated financial statements”.
Reported segment profit is based on the amount of operating income.
3. Information regarding sales, gains (or losses), assets, liabilities and other amounts by reportablesegments- 40 -

Previous fiscal yearstst（Million yen)
Consolidated
Adjustments
financial*1statements*2(from April 1 , 2010 to March 31 , 2011)
Reporting Segments

Physiologicaldiagnostic
equipment

Patient
monitoring
equipment

Medicaltreatment
equipment

Consumables
and otherproducts

25,661

8,010

36,771

19,727

90,169-90,169

-

-

-

-

-

-

-

25,661

8,010

36,771

19,727

90,169-90,169

2,095

561

3,937

1,428

8,022

-

8,022

12,1894,534

25,396

10,20052,33050,725103,056

Depreciation

602

187

4,724

463

5,978

-

5,978

Increase in
Property,plant andequipment
andintangible
assets

306

95

4,907

235

5,544

-

5,544

Total

Net sales
Sales toexternalcustomers
Internal sales
or transfers
Total

Segment profit
Segment
assetsOther items*1.

Adjustment of segment assets of 50,725 million yen include extra investment funds (cash etc.), long-term
investments (investment securities etc.), and etc. which does not allocated to each reportable segments*2. Segment profit equals to operating income of consolidated financial statements.

(ii)

Current fiscal year (from April 1st, 2011 to March 31st, 2012)
1. Reportable Segments
The reportable segments of the Fukuda Denshi Group are the constituent units of the Company forwhich separate financial information can be obtained, and they are the subject of regularexaminations by the Board of Directors aimed at helping the board to decide the allocation ofmanagement resources and evaluate the performance of the Group.
The Company has set up divisions for each product and service in the corporate headquarters, andeach of the divisions formulates comprehensive strategies for the product or service it handles, anddevelops its own business activities.
We have 4 reportable segments based on our headquarter divisions which are physiologicaldiagnostic equipment segment, patient monitoring equipment segment, medical treatment equipment
segment, and consumables and other products segment.
In the physiological diagnostic equipment segment, we mainly handle electrocardiographs,
ultrasound diagnostic imaging systems and blood cell counters. In the patient monitoring equipment
segment, we handle patient monitors. In the medical treatment equipment segment, we mainly
handle defibrillators, ventilators, pacemakers, catheters, and business of renting medical equipment
for home treatment. In the consumables and other products segment, we mainly handle consumables
used for devices handled by the above segments, as well as maintenance and repair services.
2. Methods to calculate the sales, gains (or losses), assets, liabilities and other numbers of thereportable segments
The accounting policies for the reportable segments are basically the same as those described in“Basic significant matters regarding the preparation of consolidated financial statements”.
Reported segment profit is based on the amount of operating income.

- 41 -

3. Information regarding sales, gains (or losses), assets, liabilities and other amounts by reportablesegments
Current fiscal year
(from April 1st, 2011 to March 31st, 2012)（Million yen)
Reporting Segments
Total

Adjustments*1

Consolidated
financialstatements*2

19,641

92,524－

92,524

－

－

－

－

－

8,741

37,304

19,641

92,524－

92,524

2,295

612

4,576

1,707

9,192

－

9,192

13,601

5,602

26,78910,92956,92350,102

107,025

Depreciation

582

189

4,764

426

5,963

－

5,963

Increase in
fixed assets
andintangible
assets

770

250

4,146

563

5,731

－

5,731

Physiologicaldiagnostic
equipment

Patient
monitoring
equipment

Medicaltreatment
equipment

Consumables
and otherproducts

26,837

8,741

37,304－－

26,837

Net sales
Sales toexternalcustomers
Internal sales
or transfers
Total
Segment profit
Segment
assetsOther items*1.

Adjustment of segment assets of 50,102 million yen include extra investment funds (cash etc.), long-term
investments (investment securities etc.), and etc. which does not allocated to each reportable segments*2. Segment profit equals to operating income of consolidated financial statements.

b. Related Information(i) Previous fiscal year (from April 1st, 2010 to March 31st, 2011)
1. Information about each products and services
Information about each products and services is omitted, as categories of products and services are
identical to segment information.
2. Information by geographical area
(1) Sales
Information about sales is omitted because our domestic sales accounted for more than 90% ofconsolidated sales.
(2) Tangible fixed assets
Information about tangible fixed assets is omitted because domestic tangible fixed assets
accounted for more than 90 % of tangible fixed assets of consolidated fixed assets.
3. Information by each major customer
Information about each major customer is omitted because sales for each major customer
accounted for less than 10 % of consolidated sales.

- 42 -

(ii) Current fiscal year (from April 1st, 2011 to March 31st, 2012)
1. Information about each products and services
Information about each products and services is omitted, as categories of products and services are
identical to segment information.
2. Information by geographical area
(1) Sales
Information about sales is omitted because our domestic sales accounted for more than 90% ofconsolidated sales.
(2) Tangible fixed assets
Information about tangible fixed assets is omitted because domestic tangible fixed assets
accounted for more than 90 % of tangible fixed assets of consolidated fixed assets.
3. Information by each major customer
Information about each major customer is omitted because sales for each major customer
accounted for less than 10 % of consolidated sales.
c. Information about impairment loss for noncurrent assets by reportable segments
Previous fiscal year (from April 1st, 2010 to March 31st, 2011)（Million yen)Physiologicaldiagnostic
equipment
Impairment
loss

Patient
monitoring
equipment

0

Medicaltreatment
equipment
0Consumables
and otherproducts
10

Elimination/ Corporate

Total

242

245

Current fiscal year (from April 1st, 2011 to March 31st, 2012)（Million yen)Physiologicaldiagnostic
equipment
Impairment
loss

6

Patient
monitoring
equipment

Medicaltreatment
equipment
2

Consumables
and otherproducts
8

Elimination/ Corporate

4d. Information about amortization and depreciation expense on goodwill of each reportable segment
Previous fiscal year (from April 1st, 2010 to March 31st, 2011)
Not applicable
Current fiscal year (from April 1st, 2011 to March 31st, 2012)
Not applicablee. Information about gain on negative goodwill of each reportable segment
Previous fiscal year (from April 1st, 2010 to March 31st, 2011)
Not applicable
Current fiscal year (from April 1st, 2011 to March 31st, 2012)
Not applicable- 43 -

17

Total
38

(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)
Current fiscal year (from April 1st, 2011 to March 31st, 2012)
Not applicable(Per share information)
Previous fiscal year

Current fiscal year

(April 1st, 2010 to March 31st, 2011)(April 1st, 2011 to March 31st, 2012)

Net assets per share

4,397.55 yen

4,866.46 yen

Net income per share

228.66 yen

311.84 yen

Not stated, as there is no potential
dilution.

Not stated, as there is no potential
dilution.

Fully diluted net income per
share

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

Previous fiscal year

Current fiscal year

(April 1st, 2010 to March 31st, 2011)(April 1st, 2011 to March 31st, 2012)

4,111

5,266

-

-

4,111

5,266

17,97916,888Net 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.

- 44 -

5. Non-consolidated financial statements(1) Balance sheets(Million yen)Previous fiscal yearst
(as of March 31 , 2011)

Current fiscal yearst
(as of March 31 , 2012)

AssetsCurrent assets
14,39012,13780

31

Accounts receivable-trade

21,202

22,315

Short-term investment securities

1,199

1,482

Merchandise and finished goods

2,216

2,978

10

35

Raw materials and supplies

1,095

1,149

Advance payments-trade

265

156

Prepaid expenses

310

375

Deferred tax assets

936

658

3,507

3,239

Accounts receivable-other

263

225

Other

188

170

Allowance for doubtful accounts(1,261)(1,348)

Total current assets

44,40543,606

6,308

6,397

Accumulated depreciation(3,432)(3,607)

Buildings, net

2,876

2,789

316

319

(257)

(266)

59

52

96

114

Accumulated depreciation

(61)

(68)

Machinery and equipment, net

34

45

53

54

(47)

(49)

6

5

Tools, furniture and fixtures

22,79023,306

Accumulated depreciation(13,231)(14,894)

Cash and deposits
Notes receivable-trade

Work in process

Short-term loans receivable fromsubsidiaries and affiliates

Noncurrent assets
Property, plant and equipment
Buildings

Structures
Accumulated depreciation
Structures, net
Machinery and equipment

VehiclesAccumulated depreciation
Vehicles, net- 45 -

(Million yen)Previous fiscal yearst
(as of March 31 , 2011)

Current fiscal yearst
(as of March 31 , 2012)

9,558

8,411

4,923

5,691

83

83

Accumulated depreciation

(43)

(60)

Lease assets, net

39

22

0

904

17,49817,924

5

5

Software

1,204

880

Other

300

302

1,510

1,188

Investment securities

7,157

8,235

Stocks of subsidiaries and affiliates

3,077

3,677

1

1

Investments in capital of subsidiaries
and affiliates

423

423

Long-term loans receivable

59

124

0

5

727

1,369

11

19

Deferred tax assets

2,528

1,937

Long-term time deposits

4,100

4,100

Insurance funds

4,825

5,803

Other

274

263

Allowance for doubtful accounts

(3)

(102)

Allowance for investment loss

(300)

(300)

Total investments and other assets

22,88525,56041,894

44,67286,30088,27910,354

11,633Tools, furniture and fixtures, net
Land
Lease assets

Construction in progress
Total property, plant and equipment
Intangible assets
Leasehold right

Total intangible assets
Investments and other assets

Investments in capital

Long-term loans receivable from
employees
Long-term loans receivable fromsubsidiaries and affiliates
Long-term prepaid expenses

Total noncurrent assets
Total asset

Liabilities
Current liabilities
Accounts payable-trade- 46 -

(Million yen)Previous fiscal yearst
(as of March 31 , 2011)

Current fiscal yearst
(as of March 31 , 2012)

1,400

1,700

17

17

Accounts payable-other

2,428

2,133

Income taxes payable

928

208

Advances received

8576

Deposits received

9,222

10,458Provision for bonuses

881

833

Provision for directors' bonuses

50

49

Provision for product warranties

367

462

Provision for loss on disaster

45

－

Other

211

107

25,993

27,680Long-term loans payable

620

742

Lease obligations

24

6

Provision for retirement benefits

1,188

1,149

Long-term accounts payable-other

827

819

2,660

2,717

28,65430,397

4,621

4,621

Legal capital surplus

8,946

8,946

Other capital surplus

1,036

1,081

Total capital surpluses

9,982

10,027

1,171

1,171

Reserve for business expansion

300

300

Reserve for advanced depreciationof noncurrent assets

49

53

General reserve

37,50037,500Retained earnings brought forward

9,126

11,14848,14750,173(5,047)(7,580)

Short-term loans payable
Lease obligations

Total current liabilities
Noncurrent liabilities

Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus

Retained earnings
Legal retained earnings
Other retained earnings

Total retained earnings
Treasury stock- 47 -

(Million yen)Previous fiscal yearst
(as of March 31 , 2011)
Total shareholders' equity

Current fiscal yearst
(as of March 31 , 2012)

57,70357,241

(57)

639

(57)

639

57,64557,88186,30088,279Valuation and translation adjustments
Valuation difference on
available-for-sale securities
Total valuation and translation
adjustments
Total net assets
Total liabilities and net assets- 48 -

(2) Statements of income(Million yen)Previous fiscal yearst

Current fiscal year

st

st

st

(April 1 , 2010 to March 31 , 2011)(April 1 , 2011 to March 31 , 2012)

Net sales of finished goods

14,41014,019Net sales of goods

32,31032,212Other sales

9,111

9,879

Total net sales

55,832

56,111

878

987

Cost of products manufactured

10,334

10,488

Total

11,212

11,476

Finished goods transfer to other account

2,142

1,785

987

1,246

Cost of finished goods sold

8,082

8,443

Beginning goods

2,204

1,228

Cost of purchased goods

25,516

26,816

Total

27,721

28,04457

172

Ending goods

1,228

1,731

Cost of goods sold

26,434

26,141Other cost

4,170

4,226

Total cost of sales

38,68738,811

17,14417,300Advertising expenses

691

589

Packing and transportation expenses

588

575

Service and repair expenses

465

548

Provision of allowance for doubtful
accounts

224

193

2,090

2,121

Bonuses

320

261

Provision for bonuses

549

576

Retirement benefit expenses

234

190

Provision for directors' bonuses

50

49

Commission fee

764

702

Insurance expenses

680

784

Net sales

Cost of sales
Beginning finished goods

Ending finished goods

Goods transfer to other accountGross profit
Selling, general and administrative expenses

Salaries and allowances- 49 -

(Million yen)Previous fiscal yearst

Current fiscal year

st

st

st

(April 1 , 2010 to March 31 , 2011)(April 1 , 2011 to March 31 , 2012)

230

254

Research and development expenses

3,189

3,256

Depreciation

1,179

1,194

Other

2,702

2,553

Total selling, general and administrative
expenses

13,963

13,854

3,181

3,445

Interest income

94

104

Dividends income

1,162

1,217

Real estate rent

273

280

Foreign exchange gains

－

29

Other

118

94

1,649

1,726

Interest expenses

59

67

Foreign exchange losses

109－

Provision of allowance for investment loss

48－

Loss on investments in partnership

104

90

Other

14

26

Total non-operating expenses

336

183

4,493

4,988

Gain on sales of noncurrent assets

10Gain on sales of investment securities

63

4

Surrender value of insurance

198

373

Other

22

－

Total extraordinary income

286

378

Loss on sales of noncurrent assets

5－

Loss on retirement of noncurrent assets

8－

Impairment loss

41

17

Loss on valuation of investment securities

8

307

Loss on valuation of subsidiaries' stocks

24－

Loss on disaster

94

43

Rent expenses

Operating income
Non-operating income

Total non-operating income
Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss

- 50 -

(Million yen)Previous fiscal yearst

Current fiscal year

st

st

st

(April 1 , 2010 to March 31 , 2011)(April 1 , 2011 to March 31 , 2012)2

41

Total extraordinary losses

184

409

Income before income taxes

4,596

4,956

Income taxes-current

1,516

1,070

Income taxes-deferred

15

485

Total income taxes

1,531

1,555

Net income

3,064

3,401

Other

- 51 -

Manufacturing statement
Previous fiscal yearst

Current fiscal yearst

(April 1 , 2010 to March 31 , 2011)

Note
No.

Item

Amount(million yen)

Ratio
(%)

st

st

(April 1 , 2011 to March 31 , 2012)

Amount(million yen)

Ratio
(%)

I.

Materials expenses

8,237

59.3

8,749

62.0

II.

Labor expenses

2,474

17.8

2,457

17.4

2,908

20.6

14,115

100.0

III. Other expenses
Subcontracted designing
expenses and trial
manufacture expenses

1,617

Others

1,570

1,503

3,187

22.9

Total manufacturing expenses

13,899100.0Work in progress inventories
at the beginning of the fiscal
year

48

10

171

41

14,11914,167

10

35

3,774

3,643

10,334

10,488*2Transfer from other accounts
Total
Work-in-progress inventories
at the end of the fiscal year

*3

Transfer to other accounts
Product manufacturing costs

1,405(Footnotes)
Previous fiscal yearst

Current fiscal year

stst

(April 1 , 2010 to March 31 , 2011)

1.

st(April 1 , 2011 to March 31 , 2012)

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

1. Cost calculation method*2 Breakdown of transfer from other accounts
Current assets and others(Trial manufacture and
171 million yen
research in progress)
Others0 million yen
171 million yen*2 Breakdown of transfer from other accounts
Current assets and others(Trial manufacture and41 million yen
research in progress)
Others0 million yen
Total
41 million yen*3 Breakdown of transfer to other accounts
Research and
2,800 million yen
development expenses
Current assets and others(Trial manufacture and41 million yen
research in progress)*3 Breakdown of transfer to other accounts
Research and
2,659 million yen
development expenses
Current assets and others(Trial manufacture and22 million yen
research in progress)

Others932 million yen

Others961 million yen

Total

3,774 million yen

Total

3,643 million yen

Total

Same as on the left

- 52 -

(3) Statements of changes in net assets(Million yen)Previous fiscal year

Current fiscal year

(April 1st, 2010 to March 31st, 2011)(April 1st, 2011 to March 31st, 2012)

Shareholders' equity
Capital stock
4,621

4,621

－

－

4,621

4,621

8,946

8,946

－

－

8,946

8,946

1,036

1,036

Disposal of treasury stock

(0)

45

Total changes of items during the period

(0)

45

1,036

1,081

9,982

9,982

Disposal of treasury stock

(0)

45

Total changes of items during the period

(0)

45

9,982

10,027

1,171

1,171

－

－

1,171

1,171

300

300

Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Capital surplus
Legal capital surplus
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Other capital surplus
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Total capital surplus
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Retained earnings
Legal retained earnings
Balance at the beginning of current period
Changes of items during the period
Total changes of items during the period
Balance at the end of current period
Other retained earnings
Reserve for business expansion
Balance at the beginning of current
period- 53 -

(Million yen)Previous fiscal year

Current fiscal year

(April 1st, 2010 to March 31st, 2011)(April 1st, 2011 to March 31st, 2012)

Changes of items during the period
Total changes of items during theperiod－－Balance at the end of current period

300

300

49

49

－

4

－

4

49

53

37,50037,500Total changes of items during theperiod－－Balance at the end of current period

37,50037,500

7,539

9,126

Dividends from surplus(1,477)(1,375)

Net income

3,064

3,401

－

(4)

1,587

2,021

9,126

11,14846,56048,147

Dividends from surplus(1,477)(1,375)

Net income

3,064

3,401

Total changes of items during the period

1,587

2,025

48,14750,173(2,501)(5,047)

Reserve for advanced depreciation of
noncurrent assets
Balance at the beginning of current
periodChanges of items during the period
Amount of change in reserve assets due
to tax rate changes compression
Total changes of items during theperiodBalance at the end of current period
General reserve
Balance at the beginning of current
periodChanges of items during the period

Retained earnings brought forward
Balance at the beginning of current
periodChanges of items during the period

Amount of change in reserve assets due
to tax rate changes compression
Total changes of items during theperiodBalance at the end of current period
Total retained earnings
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Treasury stock
Balance at the beginning of current period- 54 -

(Million yen)Previous fiscal year

Current fiscal year

(April 1st, 2010 to March 31st, 2011)(April 1st, 2011 to March 31st, 2012)

Changes of items during the period
Purchase of treasury stock(2,547)(2,954)

Disposal of treasury stock0422(2,546)(2,532)(5,047)(7,580)58,66357,703

Dividends from surplus(1,477)(1,375)

Net income

3,064

3,401

Purchase of treasury stock(2,547)(2,954)

Disposal of treasury stock

0

467

(959)

(461)

57,70357,241

410(57)

Net changes of items other thanshareholders' equity

(468)

697

Total changes of items during the period

(468)

697

(57)

639

410

(57)

Net changes of items other thanshareholders' equity

(468)

697

Total changes of items during the period

(468)

697

(57)

639

59,07457,645

Dividends from surplus(1,477)(1,375)

Net income

3,064

3,401

Purchase of treasury stock(2,547)(2,954)

Total changes of items during the period
Balance at the end of current period
Total shareholders' equity
Balance at the beginning of current period
Changes of items during the period

Total changes of items during the period
Balance at the end of current period
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Deferred gains or losses on hedges
Balance at the beginning of current period
Changes of items during the period

Balance at the end of current period
Total net assets
Balance at the beginning of current period
Changes of items during the period- 55 -

(Million yen)Previous fiscal year

Current fiscal year

(April 1st, 2010 to March 31st, 2011)(April 1st, 2011 to March 31st, 2012)

Disposal of treasury stock
Net changes of items other than shareholders'equityTotal changes of items during the period
Balance at the end of current period- 56 -

0

467

(468)

697

(1,428)235

57,64557,881

(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

Current fiscal year
(from April 1st, 2011 to March 31st, 2012)(1) Held-to-Maturity Securities- amortized cost method(2) Shares of subsidiaries and affiliates- Stated at cost based on the moving average method(3) Other securities
Marketable securities- Stated at fair value based on the market price as of the end of
the fiscal year.
(Unrealized holding gains or losses are reported in acomponent of net assets, with the cost of securities sold is
calculated by the moving average method.)
Non-marketable securities- Stated at cost based on the moving average method.
For investments in the investment enterprise limited Liability
association and similar associations (deemed to be securities
pursuant to Article 2, Paragraph 2 of the Financial Instruments
and Exchange Law), the net amount corresponding to theownership percentage is used, based on the most recent
financial statements available as of the reporting date and othermaterials stipulated in the partnership contract.

2.

Valuation standards andmethods for inventories

The cost method (the amounts stated in the balance sheets arecalculated by writing down the book values based on lower
profitability) is used as a valuation standard.
Merchandise and finished goods- Stated at cost determined by the first-in, first-out method.
Work in process- Stated at cost based on the specific cost method.
Raw materials- Stated at cost determined by the gross average method.
Supplies- Stated based on the last purchase price method.

- 57 -Item
3.

Current fiscal year
(from April 1st, 2011 to March 31st, 2012)

Depreciation method for fixed (1) Property, plant and equipment (excluding lease assets)
Depreciated by the declining balance method. However, buildings
assets(except for building attachments) acquired on or after April 1, 1998
were depreciated using the straight-line method.
In addition, the lifetime are as follows:
Buildings:
3 to 50 years
Structures:
10 to 60 years
Machinery and equipment:
8 to 17 years
Vehicles and delivery equipment:
4 to 6 years
Tools, instruments and fixtures: 2 to 20 years
Assets with an acquisition cost of 100,000 yen or more but lessthan 200,000 yen were evenly amortized over a three-year period.
Of the tools, instruments and fixtures, the oxygen concentrator
devices (assets for rental) were depreciated by the straight-line
method with the estimated rental period (four years) as adepreciation year.

(2) Intangible assets (excluding lease assets)
Depreciated by the straight-line method.
Software for internal use is amortized by the straight-line method
over its useful life of five years.
As for software for sale in the market, 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
Lease assets in finance lease transactions that do not transfer
ownership
The straight-line method is used, based on the assumption that theuseful life is the lease term and the residual value is zero.
Finance lease transactions that do not transfer ownership and forwhich the inception of the lease predates March 31, 2008 continue
to be accounted for in a similar manner with the ordinary rental
transactions.
4.

Basis for provision ofallowances(1) Allowance for doubtful accounts
To prepare for losses incurred by bad debts, the amount of potential
loss is calculated by using the historical loss ratio in the case ofgeneral loans or receivables. Potential losses for specific loans or
receivables, for which we have concerns regarding theircollectability, are calculated by assessing the possibility ofcollection for each individual account.
(2) Provision for bonuses
To prepare for the payment of bonuses to employees, we reserve anamount corresponding to this fiscal year’s portion of estimatedbonus payments to employees.

- 58 -

Item

Current fiscal year
(from April 1st, 2011 to March 31st, 2012)(3) Provision for director’s bonuses
To prepare for the payment of bonuses for directors and corporate
auditors, we reserve an amount corresponding to this fiscal year’s
portion of estimated bonus payments to directors and corporate
auditors.
(4) Provision for retirement benefits
To prepare for the payment of retirement benefits for employees,
the amount recognized as accruing at the end of this fiscal year was
reserved, based on estimated retirement benefit obligation andpension assets at the end of this fiscal year.
Past service liabilities are amortized, using the straight-line basis
over a certain number of years (10 years), which are less than the
average remaining years of service of the employees when they
incurred.
Actuarial differences are amortized, using the straight-line
basis over a certain number of years (10 years), which are lessthan the average remaining years of service of the employees
when they incurred, from the fiscal year after the one in which
they arise.
(5) Provision for product warranties

To prepare for the expenses incurred by free repair to be
implemented after the delivery of the products, an estimatedamount of the repair expenses was reserved on the basis of theestimated proportion of such expenses to net sales and theestimated amount of such expenses for individual products.
5.

Other important matters for
preparation of financial
statements

Accounting treatment of consumption tax, and other taxes, etc.
The Consumption tax and other taxes, etc. are excluded fromprofits and losses.

- 59 -

6. Others(1)Changes of directors(i) Representative Director
Not applicable(ii) Other directors
・Candidate for auditor to be newly appointed(Part-time) Auditor: Mr. Teruhisa Okano
・Auditor to retire(Part-time) Auditor: Mr. Tatsuo Izawa(iii) Scheduled appointment dateJune 28th, 2012

*This English translation is for reference purposes only. The original Japanese version will prevail as theofficial authoritative version.

- 60 -