Consolidated Financial Statements

November 25, 2003

For the Six Months Period ended September 30, 2003 (Fiscal Year ending March 31, 2004)
Company name: NIPRO CORPORATIONTokyo and Osaka
Stock Exchange where listed:
Code No:
8086
Head Office:Osaka, Japan(URL: http://www.nipro.co.jp/)
Representative:
Minoru Sano, President and Representative Director
Contact:
Akihiko Yamabe, Director, General Manager of Accounting Division
TEL (06) 6372-2331
Date of the meeting of the Board of Directors for approval of the financial statements: November 25, 2003
Adoption of U.S. GAAP: No
1.

Consolidated Results for the Six Months ended September 30, 2003 (From April 1 to September 30, 2003)(1) Consolidated Results of Operations(Note: Amounts are rounded off per 1 million yen)
Net Sales
Operating Income
Recurring Income
Millions of yen%

Millions of yen%

Millions of yen%

92,02989,408180,369

2.9
6.7

5,678
7,386
14,899(23.1)
8.0

4,234
5,500
11,397(23.0)(8.0)

Six months ended Sept. 30, 2003
Six months ended Sept. 30, 2002
Year ended March 31, 2003

Net Income
Millions of yen

Earnings per Share
Yen%

Diluted Earnings per ShareYen

Six months ended Sept.30, 2003
1,887
(27.2)
29.66
Six months ended Sept. 30, 2002
2,592
(12.4)
45.06
41.03
Year ended March 31, 2003
5,077
84.25
78.48
Notes: 1. Equity in losses of affiliate for the six months ended September 30, 2003, 2002 and for the fiscal year ended March 31, 2003
was (486) million yen, (342) million yen and (657) million yen, respectively.
2. The weighted average number of shares outstanding for the six months ended September 30, 2003, 2002 and for the fiscal year
ended March 31, 2003 was 63,639,242 shares, 57,535,917 shares and 58,949,626 shares, respectively.
3. Change in accounting method: N/A
4. Percentages in the above table for Net Sales, Operating Income, Recurring Income and Net Income represent changes from thecorresponding period of the previous fiscal year.

(2) Consolidated Financial Position
Total Assets

Shareholders’EquityRatio of Shareholders’Equity to Total Assets%

Shareholder’ Equity
per Share

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents

Millions of yen

Millions of yen

Millions of yen
Millions of yen
Yen
Six months ended Sept. 30, 2003
267,283
87,12932.6
1,369.33
Six months ended Sept. 30, 2002
249,103
79,51431.9
1,328.13
Year ended March 31, 2003
252,847
83,53233.0
1,310.72
Notes:The number of shares outstanding as of September 30, 2003, 2002 and March 31, 2003 was 63,629,277 shares, 59,869,373
shares and 63,645,860 shares, respectively.

(3) Consolidated Cash Flows
Cash flows fromoperating activities
Millions of yen
Six months ended Sept. 30, 2003
Six months ended Sept. 30, 2002
Year ended March 31, 2003

6,679
3,649
5,453

(5,185)(14,387)(30,107)(4) Matters related to scope of consolidation and application of equity method
Number of consolidated subsidiaries:
Number of unconsolidated subsidiaries accounted for by the equity method:
Number of affiliate company accounted for by the equity method:(5) Change of reporting entities
Number of consolidated companies
Number of companies accounted for by the equity method
2.

Millions of yen

12,9497,790
11,469Added:
Added:

0043,90939,33629,39314
0
1

Removed:Removed:00Projected Consolidated Financial Results for the Fiscal Year ending March 31, 2004 (From April 1 to March
31, 2004)

Sales

Recurring Income

Millions of yen

Year ending March 31, 2004

187,000

Net Income

Millions of yen

9,200

Millions of yen

4,150(Reference) Projected Earnings per Share for the Fiscal Year ending March 31, 2004: 63.48 yen* The projections shown above are prepared based on information available as of the issuing date of thisreport. The actual results may differ from the projected figures due to various factors. Concerning thematters related to the above projections, please refer to the Page 8.
-1-

Corporate GroupOur group consists of the Reporting Company (“the Company”), its 18 subsidiaries and 1 affiliate, and isprimarily engaged in manufacture and sales of medical equipment, pharmaceutical products and glass andmaterial products as well as the management of supermarkets and drugstores.
Positioning of each company in connection with the businesses of our group and the relation to the businesssegments are as follows:<Medical Division>
Domestic:
The Company and Nipro Medical Industries, Ltd., a consolidated subsidiary, manufacture
medical equipment, and the Company sells medical equipment manufactured by its foreignsubsidiaries.
Overseas:
Consolidated subsidiaries Nipro (Thailand) Corporation Ltd. (Thailand), Fuzhou Nipro Co.,
Ltd. (China), Nipro (Shanghai) Co., Ltd. (China) and Nipro Medical LTDA. (Brazil) purchases
some of raw materials for their production as well as production machinery from theCompany, manufacture medical equipment, sell through the Company and its subsidiaries
as well as locally on their own.
Consolidated subsidiaries Nipro Europe N.V. (Belgium), Nipro Medical Corporation(U.S.A.), Nipro Medical Panama S.A. (Panama) and Nipro Medica de Mexico S.A. DE C.V.
(Mexico), and unconsolidated subsidiary Nipro Asia Pte. Ltd. (Singapore) and Nipro Trading(Shanghai) Co., Ltd. (China) sell medical equipment etc. in the areas of their locations.
Nipro Diabetes Systems, Inc. (U.S.A.), an unconsolidated subsidiary, develops portablediabetes-related products such as Insulin Pump.
<Pharmaceutical Division>
The Company and Nipro Pharma Corporation (previous company name: Hishiyama
Pharmaceutical Co., Ltd.) manufacture and sell pharmaceutical products.
Bipha Corporation, an affiliated accounted for by the equity method, is engaged inresearch and development, manufacture and sales of pharmaceutical products such as
blood products.
<Glass and Materials Division>
Domestic:
The Company sells glass tubes in the Kansai area as well as manufactures and sells
other glass products.
In the Kanto area, Shinwa Shoji Co., Ltd., a consolidated subsidiary, purchases glass
tubes as raw materials, and manufactures and sells glass products.
Overseas:
Shanghai Nissho Vacuum Flask Refill Co., Ltd. (China) manufactures internal glass
sections of vacuum flask and other glass products, and sells locally as well as exports.
<Supermarket Division>
Nissho Corporation, a consolidated subsidiary, operates supermarkets in the Keihanshin
region, selling fresh produce etc.
Nissho Drug Co., Ltd., a consolidated subsidiary, carries out drugstores in Hanshin
region, mainly retailing medicine and general grocery, etc.
<Other>
The Company manufactures (purchases, in some cases) and sells machinery for
manufacture of medical equipment.
The Company and Nissho Corporation lease real estate properties.
Nissho Insurance Services Co., Ltd. operates non-life insurance agency mainly for thegroup companies.
Sanri Kosan Co., Ltd., an other affiliate company, is engaged in leasing of real estate
properties.
The above explanations are illustrated as follows:-2-

(Domestic)(Overseas)

Medical Division

Medical Division<Manufacturing><Manufacturing and Sales>◎Nipro Medical Industries, Ltd.

◎Nipro (Thailand) Corporation Ltd.
◎Fuzhou Nipro Co., Ltd.
◎Nipro (Shanghai) Co., Ltd.
◎Nipro Medical LTDA.

Pharmaceutical Division<Manufacturing and Sales><Sales>◎Nipro Pharma Corporation◎Nipro Europe N.V.
◎Nipro Medical Corporation◎Nipro Medical Panama S.A.
◎Nipro Medica de Mexico, S.A. DE C.V.
○Nipro Asia Pte. Ltd.
○Nipro Trading (Shanghai) Co., Ltd.

<Development, Manufacturing
and Sales>

Glass & Materials Division<Manufacturing and Sales>◎Shinwa Shoji Co., Ltd.

Nipro Corporation□Bipha Corporation<Development and Sales>○Nipro Diabetes Systems, Inc.

Glass & Materials Division

Supermarket Division<Manufacturing and Sales><Supermarket management>◎Shanghai Nissho Vacuum
Flask Refill Co., Ltd.

◎Nissho Corporation<Drugstore management>◎Nissho Drug Co., Ltd.

Supply of products andmerchandises
Other

Supply of raw materials<Non-life insurance agency>
Other transactions○Nissho Insurance Services Co., Ltd.

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

-3-◎

Consolidated subsidiary○

Unconsolidated subsidiary□

Affiliate accounted for by theequity method△

Other related company

Management Policies
1. Basic Policies of Management
Since our foundation, we have based ourselves on “technology” and aimed at manufacturing better
products at lower costs. We set our management objective in contributing to the society throughcorporate activities, especially focusing on developing new products in the field of medical andpharmaceutical products.
As a management structure in pursuit of compatibility between “stability” and “growth”, which areessential for an enterprise, we implement the “performance-linked remuneration system” that is the rule ofprofit sharing among shareholders, employees and management, and carry out active business
operations, holding the employees responsible for boosting the performance of individual businesses.

2. Basic Policies on Distribution of Profits
Our policy is that 50% of the non-consolidated net income is to be distributed to the shareholders.
Employees’ bonuses are determined according to the business performance of the division where theemployees belong, and the bonuses of the directors and the statutory auditors are determined based on
the business performance of the Company.
Retained earnings are to be held for the future expansion of the business, but shall be returned to theshareholders through dividends by future improvement of profitability.
With this policy in mind, we will conduct our businesses in a long-term view and will aggressively
devote funds into investments in sales and production facilities as well as in Research and Development.

3. Position and Policy on Reduction of Trading Unit of Stock
We consider that reduction of trading unit of stock will promote individual investors into the market andlead to the revitalization of the securities market. Therefore, we will seriously consider to reduce thetrading unit, carefully taking into account the stock’s price level, liquidity and conditions of supply anddemand as well as costs and benefits.

4. Target Management Indicators
Our performance targets are to achieve 300 billion yen of consolidated net sales, 20 billion yen of
consolidated recurring income and 10% of return on equity by the fiscal year 2010.
In the Medical Division, we, as a general medical equipment manufacturer, will seek to enlarge themarket share of Nipro-branded products by reinforcing the product line-up and expanding overseas sales
network. We will strengthen the sales in the field of dialysis-related products such as dialyzers andmaintain the leading share in the market, while we will focus on development of advanced medical
technologies in the field of catheters and artificial organs.
In the Pharmaceutical Division, we will promote further the commercialization of kit products, increase
sales of double-bag kits, powdered dialysate solutions and test reagents, and expand in the field of
injection and infusion drugs and secure the leading share in the market.
In the Glass and Materials Division, we will devote ourselves on reduction of manufacturing costs
based on our peerless glass processing technologies and supply high-quality and low-price products inview of global marketing.
In the Supermarket Division, we will strive to make attractive product offerings for fresh food andmedicine etc. and bear closely on the daily needs of neighborhood customers.

5. Medium- and Long-term Management Strategies
In the Medical Division, we will conduct research and development on wide variety of artificial organs
and tissues, including artificial kidneys, artificial hearts, artificial skin and artificial blood etc., and try to
become a world’s leading manufacturer of artificial organs. In the Pharmaceutical Division, we will
promote research and development specialized in the fields of renal diseases, blood and intravenous
alimentation. In the Glass and Materials Division, we will establish the framework of production and salesof thermos bulbs in the Chinese market, and make further inroads into foreign markets by improving costs
and quality of glass products for pharmaceutical containers. In the Supermarket Division, we will offer avariety of prepared meals at the Nissho Stores, while we expand drugstore business by opening moredrugstores mainly in the Keihanshin region.
-4-6. Issues and challenges that the Nipro Group faces
In the domestic business of the Medical Division, we will focus on dialysis-related products such as
dialyzers, blood tubing sets, substitution fluid for hemofiltration and hemodiafiltration, powdered dialysate
solutions and dialysis machines, endeavor to react to the market needs promptly, develop and market new
products, improve the product quality, strengthen sales activities and increase the market share. In thefield of injection, infusion and catheters, we will attempt to increase our market share of injection- andinfusion-related products such as infusion sets and syringes, as well as to develop, market and promote
new products such as intravascular catheters. With regard to the products related to circulatory organs,
we will introduce, market and promote new products such as Thrombus vacuum aspiration catheter and
PTCA Balloon, and increase our market share. In addition, as for the examination-related products, wewill market and promote blood glucose monitoring system for diabetic patients and test reagents,
introduce new products of blood collection tubes and enlarge our market share.
For the international business, as the world is increasingly becoming a single market, we will cope withthe trend of globalization by dynamically combining the strategies of marketing, pricing and developmentof products. Also, as the governments are tightening safety regulations for medical equipment, we willfurther strive to secure the safety of our products. In addition, we need advantageous and distinctive
products in order to enlarge our market share in the world market. We will strongly promote thedevelopment of value-added products, and also, based on the excellence of our own technologies, form amarket “consortium” in terms of sales co-operation and joint development. Furthermore, we will improve
product line-up, for instance, a new dialysis machine for dialysis-related products, precision infusion
pumps for diabetes-related products, safety AV fistula needles for safety-related products and guidewires
for products related to circulatory organs, and increase sales through our own sales network that is rapidly
expanding in the world.
In the Pharmaceutical Division, we will start selling the new products such as two-bag type powdereddialysate solutions and “liquid-and-powder” double-bag kits for antibiotics, and further market suchproducts. We are energetically developing new kit products such as pre-filled syringes, and we will strive
to accelerate the speed of development. In addition, we will continue the development of pharmaceuticalproducts in application of recombinant human serum albumin such as artificial blood and Drug Delivery
System (DDS) and products related to recombinant protein for the renal diseases, and we will alsoendeavor to expand our pharmaceutical business by developing kit products, among others, that
contribute to improvement of medical treatment in terms of safety and hygiene.
In the Glass and Materials Division, in order to respond to the transformation of containers in the fieldof glass for pharmaceutical purposes, we will develop the pre-filled syringe containers and aim to enlarge
the market. In the area of glass for lighting purposes, we will strive to increase the sales by constant
supply of glass for liquid crystal display (LCD) backlight and related materials, in line with the expansion of
the domestic market, and by promotion in the overseas market. We will also promote colored glass thatmeets the requirements for environment preservation to the industries such as automobiles and consumer
electronics.
In the Supermarket Division, we will control the proper level of labor costs and improve the productivity
by establishing a new human resources management system and reviewing the work schedule system(LSP), and improve profitability by reducing expenses. Also, in order to improve the businessperformance, we will introduce “Weekly Change System” that will enable us to precisely understand thetrend of customers’ purchases and to reflect such trend quickly to the selling places, improve productline-up and develop products that correspond to the change in customers’ needs reflecting the trend for
health-oriented products and aging population etc. Furthermore, we will take various measures todifferentiate our stores from those of the competitors, by making use of the information technologies, forinstance, providing e-mail members with information on special sales and daily life and “Direct Shop” amail order service that delivers premium products from all over Japan, and by arranging the sales placedelicately and providing exhaustive customer service.

-5-

7. Basic Perspective on Corporate Governance and Implementation of Related Measures(1) Basic Perspective on Corporate GovernanceWe consider improvement of Corporate Governance to be one of the most critical issues in view of anenterprise’s social responsibility, and we endeavor to strengthen our administration system and to makesound and efficient management structure.
(2) Implementation of Measures Related to Corporate Governancea. Current Condition of the Corporate Governance System
・ Our management administration organization related to the Company’s management decision
making, policy execution, and supervision is basically in accordance with the systems of board of
directors and board of auditors, as set forth in the Japanese Commercial Code. Specifically, we
have established a self-sufficient management administration framework for each business division,
which clearly define the responsibilities and improve the administration system.
・ All of the current three auditors are outside auditors as provided in the paragraph 1 of the Article 18
of “The Audit Special Exceptions Law”. Currently, no outside directors are appointed.
・ Structure of the Company’s business execution, supervision and internal control

Shareholders Meeting
President(Appointment)

Accounting
Auditor(Auditors)(Directors)

Board ofAuditors

Board ofDirectors(Decision Making)Accounting
Audit

Operational
Audit

Third
partiessuch aslawyersandaccountants etc.

Rewards andPunishments
Committee

Directors

Management
Risk Control
Committee

Division Managers
General Managers,
Section Managers,
etc.

Audit ofDirectors’
policyexecution

・ The Company retains lawyers, accountants, tax accountants, patent attorneys and otherprofessionals under advisory contracts with regard to law, labor, accounting, taxation, andintellectual property etc. so that we can conduct our business properly and timely and havemanagerial advices from an objective viewpoint.
b. Personal, Capital or Transactional Relationships, and/or Other Interests Between the Company and
Its Outside Directors and Auditors
There are no such special relationships between the Company and its outside auditors.
c.

Implementation in the Past Year of Measures Designed to Strengthen the Company’s Corporate
Governance・ In April 2003, the Management Risk Control Committee is set up in an effort to establish a structure
to control management risks and promote compliance with corporate ethics including laws andordinances. We are striving to enlighten the employees by distributing a booklet titled “the Codeof Conduct for Compliance with Laws, Ordinances and Corporate Ethics” to our employee and byplacing the articles in the corporate magazines.

-6-

Business Results and Financial Conditions
1. Business Results(1) Summary of Overall Business and Results by Segments
Japanese economy showed some signs of improvement in terms of capital spending and stock
prices. However, personal consumption continued to be weak, affected by severe employment andincome conditions, and the mood of recession generally remained for the period under review.
Under such conditions, the Company continued to focus on research and development, and to
conduct active sales activities.
As a result, the consolidated net sales for the six months period under review increased to 92,029
million yen (up 2.9% compared with the same period of the previous fiscal year), operating income
decreased to 5,678 million yen (down 23.1% compared with the same period of the previous fiscal year),recurring income decreased to 4,234 million yen (down 23% compared with the same period of theprevious fiscal year), net income decreased to 1,887 million yen (down 27.2% compared with the same
period of the previous fiscal year).
The results by segments were as follows:a. Medical Division
For the domestic business, controls on the medical expenditures were becoming increasingly
severe in the market. In such climate, we attempted to enhance the efficiency of sales activity andreinforce the sales bases. We also made efforts to develop, market and promote new products in thefields of dialysis, injection and infusion, treatment on circulatory organs and examination. However,the cost competition has been further intensified, and we also had the adjustments on distributors’
inventory.
As for the international business, we were able to achieve steady sales by the market penetration of
Nipro-branded products and the increased demands for the diabetes-related products and thevalue-added products with safety features. However, we were affected by the decline in prices led by
the price competition that has been even harder in the market.
As a result, net sales of this division decreased to 37,745 million yen (down 1.4% compared with thesame period of the previous fiscal year).
b. Pharmaceutical Division
The market of the pharmaceutical business has become awfully harsh, due to the intense price war.
Under these circumstances, we attempted to increase sales of powdered dialysate solutions andsubstitution fluid for hemofiltration and hemodiafiltration, etc. We also exerted ourselves to expand
sales of “liquid-and-powder” double-bag kits and pre-filled syringe kits, etc. Self-Monitoring of Blood
Glucose system that we introduced from abroad also contributed significantly.
As a result, net sales of this division increased to 11,893 million yen (up 18.3% compared with thesame period of the previous fiscal year).
c.

Glass & Materials Division
In the field of glass for pharmaceutical purposes, despite the shift from glass ampoules and vials toother containers made of plastics in the domestic market, the sales increased owing to the favorable
trend in exports of glass tubes and domestic sales of nursing bottles and large-sized vials forlaboratory. As for the other glass materials, sales of glass for thermos bottles remained steady amid
the competition with cheaper imported products. For the glass for lighting purposes, sales of glass forliquid crystal display (LCD) backlight and related materials were in an upward trend, along with the
expansion of the industry of LCD for televisions and displays.
As a result, net sales of this division increased to 5,637 million yen (up 5.9% compared with thesame period of the previous fiscal year).

d. Supermarket Division
The market climate of supermarket business was really severe, due to the various factors, i.e.
prolonged recession, sluggish personal consumption caused by the deteriorating employment andfamily income, bad weathers such as the longer rainy season and the cooler summer than usual,foreign capitals’ entering into market, and the intensified competition arising from the competitors’
opening new stores.
Despite such circumstances, our food supermarkets attempted to increase the customers by giving
privileged offers to the “Point Card” members, and maintained the average amount of sales per
customer by increasing the number of the stores with liquor sales license and by other measures toincrease sales. Drugstores, on the other hand, opened 11 new stores during the period under review,and contributed to the increase in sales.
As a result, net sales of this division increased to 36,110 million yen (up 3.3% compared with the-7-same period of the previous year).
e. Other Division
Net sales of this division, consisting mainly of sales of machine for manufacture of medical
equipment and real estate rentals, decreased to 643 million yen (down 20.6% compared with the same
period of the previous year).
(2) Prospects for the Fiscal Year Ending March 31, 2004
The Japanese economy is anticipated to remain in the uncertainty, due to the concerns inappreciation of yen and rise of interest rate arising from the expectation of economic recovery.
Under the conditions, we will strive to improve the business performance by focusing on Researchand Development and Sales and Marketing.
For the fiscal year ending March 31, 2004, we project the consolidated net sales of 187,000 million
yen (up 3.7% compared with the previous fiscal year), operating income of 11,800 million yen (down
20.8% compared with the previous fiscal year), recurring income of 9,200 million yen (down 19.3%
compared with the previous fiscal year), net income of 4,150 million yen (down 18.3% compared withthe previous fiscal year).

2. Financial Conditions(1) Analysis of the conditions of assets, liability, shareholders’ equity and cash flows
Total assets as of September 30, 2003, increased by 14,435 million yen from the end of theprevious fiscal year to 267,283 million yen. Current assets increased by 9,750 million yen to 126,181
million yen, and fixed assets increased by 4,685 million yen to 141,101 million yen. Cash and bankdeposits increased by 13,369 million yen in the current assets, and investment securities increased by
3,368 million yen in the fixed assets.
Total liabilities increased by 10,823 million yen from the end of the previous fiscal year to 178,370
million yen. Current liabilities decreased by 4,131 million yen to 84,757 million yen, and noncurrent
liabilities increased by 14,954 million yen to 93,612 million yen. Current portion of bonds decreased
mainly by 2,000 million yen in the current liabilities, and convertible-bond-type bonds with stockacquisition rights increased by 14,000 million yen in the noncurrent liabilities.
Total shareholders’ equity increased by 3,596 million yen from the end of the previous fiscal year to87,129 million yen. In this section, earned surplus increased by 1,076 million yen to 28,981 million yen,and valuation differences of other securities increased by 2,523 million yen to 5,374 million yen.
Net cash provided by operating activities was 6,679 million yen, net cash used in investing activities
was 5,185 million yen, net cash provided by financing activities was 12,949 million yen, and cash andcash equivalents increased by 14,515 million yen to 43,909 million yen. Net cash used in investing
activities mainly reflected the payments for acquisition of fixed assets for 7,017 million yen. Net cash
provided by financing activities was mainly from the proceeds from issuance of the bonds for 13,965
million yen.

-8-(2) Trend of the cash flow indicators

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

Fiscal Year
ended March
31, 2002
31.0

Six Months
ended Sept.
30, 2002
31.9

Fiscal Year
ended March
31, 2003
33.0

Six Months
ended Sept.
30, 2003
32.6

41.8

55.3

45.7

45.4

14.1
4.3

4.2

21.7
3.1

8.2

Note: Shareholders’ equity ratio = Shareholders’ equity / Total Assets
Ratio of market value of shareholders’ equity = Aggregate market value of the outstanding
shares / Total Assets
Debt redemption = Interest-bearing liabilities / Cashflow from operating activities (omitted forthe six months periods)
Interest coverage ratio = Cashflow from operating activities / Interest payments- Each indicator is calculated from consolidated financial data.
- Aggregate market value of the outstanding shares is calculated as the share price at the fiscal
year-end multiplied by the number of issued shares (excluding treasury stock).
- Cashflow from operating activities is taken from cash flows from operating activities on the
consolidated statements of cash flows. Interest-bearing liabilities represent all liabilities on the
consolidated balance sheets for which interest is payable. The amount of interest payments isthe taken from the payments of interests on the consolidated statements of cash flows.

-9-Consolidated Balance Sheets

PeriodAccount

As of
September 30, 2002
Amount(ASSETS)
Current Assets
Cash on hand and in banks

Trade notes and accounts
receivable
Securities
Inventories
Deferred tax assets
Other current assets
Allowance for doubtful
accounts
Fixed Assets
Tangible fixed assets
Buildings and structures
Machinery, equipment
and vehicles
Land
Construction in progress

OthersIntangible fixed assets
Consolidation adjustments

Others

As of
September 30, 2003

Ratio

Amount%115,770

46.5(Unit: Millions of yen)
As ofMarch 31, 2003

Ratio

AmountRatio%
126,18147.2%
116,43140,71445,90932,53940,50414
30,1081,732
2,882

40,80633,763
1,903
3,958

42,761
31,213
2,244
7,873

(186)

(159)

(201)

133,33253.5

141,101

52.8

136,41654.0

87,06334.9

92,712

34.7

91,14636.1

38,21040,511

38,841

17,76622,476
5,488
3,121

20,58522,474
5,844
3,296

19,74822,459
6,852
3,245

1,434

0.6

1,147

325
1,109

0.4

131
1,016

Investment securities
Long-term loans
receivable
Deferred tax assets
Lease deposits
Other assets
Allowance for doubtful
accounts

27,90230,38727,0182,451
156
12,324
2,676

2,712
192
11,805
2,833

2,601
175
12,234
2,660

(676)

(689)

(692)

100.0

47,241

267,283

0.5

213
1,057

44,834249,103

18.0

1,271

Investments and other assets

Total Assets

46.0

17.7

100.0

43,998

252,847

17.4

100.0

(Millions of yen)

(Notes)1. Accumulated depreciation of tangible
fixed assets
2. Notes receivable discounted
3. Obligations under guarantee contracts
4. Pledged assets

As of
September 30, 2002

80,822
33
3,545
18,983- 10 -

As of
September 30, 2003

87,3648
3,000
16,481As ofMarch 31, 2003

83,90835
3,273
18,090Consolidated Balance Sheets

PeriodAccount

As of
September 30, 2002
Amount(LIABILITIES)Current liabilities
Trade notes and accounts
payableShort-term borrowings
Current portion of bonds
Current portion of convertible
bonds

Other payables
Income taxes payable
Accrued bonuses
Allowance for price reduction
Notes payable for plant andequipment
Commercial paper
Other current liabilities

Noncurrent liabilities
Bonds
Convertible-bond-type bonds
with stock acquisition rights

Long-term borrowings
Deferred tax liabilities
Accrued pension andseverance cost

OthersTotal liabilities

Ratio

As of
September 30, 2003
AmountRatio%
106,646(Unit: Millions of yen)
As ofMarch 31, 2003
Amount%42.8

84,75731.7%
88,88828,04432,71515,00029,14035,680-27,08536,257
2,000

6,120
3,042
2,817
2,146
936

3,711
1,517
1,793
11

3,783
2,619
1,587
1,359

4,530
7,000
4,293

3,485
6,500
2,917

3,356
7,000
3,838

61,32624.6

93,612

35.0

Ratio

78,65730,00036,00036,00023,7892,069

14,00035,632
2,086

36,821
541

2,001
3,466

2,445
3,447

1,977
3,317

35.2

31.1

167,97367.4

178,370

66.7

167,546

66.3

1,615

0.7

1,783

0.7

1,768

0.7

25,66026,976
26,677

10.3
10.8
10.7

28,66329,972
28,981

10.7
11.2
10.8

28,66329,972
27,904

11.3
11.9
11.0

4,775

1.9

5,374

2.0

2,850

1.1

Treasury stock(4,367)
(208)

(1.7)
(0.1)

(5,378)
(482)

(2.0)
(0.1)

(5,406)
(451)

(2.1)
(0.2)

Total shareholders’ equity

79,51431.9

87,12932.6

83,53233.0

Total liabilities, minority interests,
and shareholders’ equity

249,103

100.0

267,283

100.0

252,847

100.0(MINORITY INTERESTS)
Minority interests(SHAREHOLDERS’ EQUITY)

CapitalCapital surplus
Earned surplus
Valuation differences of othersecurities
Foreign currency translation
adjustments(Notes)5. Number of treasury stock
Common stock

As of
September 30, 2002

As of
September 30, 2003

109,818 shares

249,228 shares- 11 -

As ofMarch 31, 2003

232,645 shares

Consolidated Statements of Income
PeriodAccount

From April 1, 2002
To September 30, 2002
AmountFrom April 1, 2003
To September 30, 2003

Ratio
%

Amount

Ratio%(Unit: Millions of yen)
From April 1, 2002
To March 31, 2003
AmountRatio%

Net sales
Cost of goods sold

89,40863,705100.0
71.3

92,02966,979100.0
72.8

180,369
128,775

100.0
71.4

Gross profit

25,70328.7

25,05027.2

51,594

28.6

Selling, general andadministrative expenses

18,31620.4

19,37221.0

36,695

20.3

Operating income

7,386

8.3

5,678

6.2

14,8998.3

Non-operating income

405
111
108

0.5

520
85
93

0.5

755
207
190

0.4

Interest income
Dividend income
Gain on sale of investment
securities
OthersNon-operating expenses
Interest expenses
Equity in loss of affiliate
Exchange loss
OthersRecurring income
Extraordinary gains
Reversal of allowance for
doubtful accounts

Subsidies received
Lease termination fee
received

OthersExtraordinary losses
Loss on sales and disposals
of fixed assets
Loss on disposal of
inventories
Loss on devaluation of
investment securities
Advanced depreciation
deductions
Abnormal manufacturing cost
Loss on claims
Amortization of transitional
difference from change inaccounting standards of pension
and severance benefits

Loss from bad debts
Compensation for breach ofcontract
Others
Net income before
adjustment of taxes
Corporate, inhabitants andenterprise taxes
Adjustment for deferred taxes
Minority interests in net incomeof consolidated subsidiaries

Net income

185
2,291
860
342
1,036
51
5,500
596

6.2

139
200
1,963
830
486
534
112
4,234

0.6

151

2.6

4.6

357
4,256
1,671
657
1,749
177
11,397

6.3

0.1

1,334

0.7

2.1

41
549

109
-

42
1,129

5
1,434

41
852

85
77
3,951

1.6

0.9

54

216

341

13

8

48

383

98

628

549
171
-

155
11

1,129
111
308

38
-

38
290

76
-

214
8

31

1,178
129

2.4

2.2

4,661

5.2

3,533

3.8

8,780

4.8

2,695
(671)

3.0
(0.8)

1,476
154

1.6
0.1

4,957
(1,340)

2.7
(0.7)

45
2,592

0.1
2.9

15
1,887

0.0
2.1

85
5,077

0.0
2.8

- 12 -

Consolidated Statements of Surplus

PeriodAccount

From April 1, 2002
To September 30, 2002

From April 1, 2003
To September 30, 2003

AmountAmount(Unit: Millions of yen)
From April 1, 2002
To March 31, 2003
Amount(CAPITAL SURPLUS)
Beginning balance of capitalsurplus
Beginning balance ofadditional paid-in capital

24,43429,972

24,43424,43424,434

Increase in capital surplus

2,542

-

5,537

Conversion of convertible
bonds

2,542

-

5,537

26,97629,972

29,97225,81027,90425,810Ending balance of capitalsurplus(EARNED SURPLUS)
Beginning balance of earned
surplus
Beginning balance ofconsolidated retained earnings

25,810

Increase in earned surplus
Net income

2,592
2,592

1,887
1,887

5,077
5,077

Decrease in earned surplus
Dividends

1,725
1,557

811
700

2,983
2,814

Bonuses to directors andcorporate auditors

168

111

168

[Bonuses to corporate auditors,
inclusive]

[7]

[5]

[7]

26,67728,981

27,904Ending balance of earned
surplus25,810- 13 -

Consolidated Statements of Cash Flows(Unit: Millions of yen)
PeriodAccount

From April 1, 2002
To September 30, 2002

From April 1, 2003
To September 30, 2003

From April 1, 2002
To March 31, 2003

AmountAmountAmountCash flows from operating activities
Net income before adjustment for taxes

Depreciation and amortization
Amortization of consolidation adjustments

Equity in loss of affiliate
Increase (decrease) in allowance for
doubtful accounts

Interest and dividend income
Interest expenses
Exchange loss (gain)
Other non-operating income/expenses
and extraordinary gains/losses
Decrease (increase) in trade receivables

Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in other assets
Increase (decrease) in other liabilities
Bonuses to directors and corporate auditors

SubtotalInterest and dividends received
Interest paid
Other expenditures
Other receipts
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Deposits in time deposits
Proceeds from matured time deposits
Payments for purchases of securities

Proceeds from sales of securities
Payments for acquisition of fixed assets
Proceeds from sales of fixed assets

Lending of loans
Collections of loans receivable
Payments for investments in capital
Reimbursements of investments in capital

Cash flows from investing activities

4,661
4,017
111
342

3,533
4,606
82
486

8,780
8,766
222
657

(46)
(218)
860
793

(43)
(179)
830
534

(15)
(397)
1,671
1,039

1,141
(1,239)(3,354)
71
601
258
(168)
7,832
205
(878)
(396)
283
(3,397)
3,649

462
1,557
(2,312)
1,957(187)(1,256)
(111)
9,961
115
(819)
(447)
454
(2,585)
6,679

2,727
(3,883)(4,517)(1,004)
(675)
436
(168)
13,639362(1,755)(1,702)736(5,826)
5,453

(820)
550
(1,068)
5(12,649)
21
(478)
54
(3)
1
(14,387)(1,214)
2,393
(14)
447
(7,017)
219
(1)
26
(23)
(5,185)(3,493)
1,373(4,060)20(23,886)
143
(257)
56
(4)
1
(30,107)

(19)
7,000
5,600
(2,953)(153)(126)(1,555)(2,028)(500)
3,566(3,307)
13,965(2,000)
(31)
(156)
(700)

3,718
7,000
23,598(8,181)
5,966(13,122)
105
(396)
(268)
(2,810)

(0)
7,790

4,141
12,949(4,141)(0)
11,469

(500)

71

(206)

(3,447)

14,515(13,391)

42,78429,39342,78439,33643,90929,393

Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Net increase (decrease) in commercial paper

Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of bonds
Payments for redemption of bonds
Proceeds from issuance of common stock

Payments for purchases of treasury stock

Repayments of lease obligations
Payments for dividends
Reimbursement of funds for redemptionof convertible bonds
Deposit of funds for redemption of convertible
bonds

OthersCash flows from financing activities
Effect of exchange rate changes oncash and cash equivalents
Increase (decrease) in cash and cash
equivalents
Balance of cash and cash equivalents
at the beginning of the period
Balance of cash and cash equivalents
at the end of the period- 14 -

Basis of Preparation for the Consolidated Financial Statements
1. Scope of Consolidation
1) Consolidated subsidiaries: 14
・
・
・
・
・
・
・

・
・
・
・
・

Nipro Medical Industries, Ltd.
Fuzhou Nipro Co., Ltd.
Nipro Medical LTDA.
Nipro Medical Corporation
Nipro Medica de Mexico S.A. DE C.V.
Shinwa Shoji Co., Ltd.
Nissho Corporation

Nipro (Thailand) Corporation Ltd.
Nipro (Shanghai) Co., Ltd.
Nipro Europe N.V.
Nipro Medical Panama S.A.
Nipro Pharma Corporation

・ Shanghai Nissho Vacuum Flask Refill Co., Ltd.

・ Nissho Drug Co., Ltd.

(Note) On April 1, 2003, Hishiyama Pharmaceutical Co., Ltd. changed its company name to Nipro
Pharma Corporation.
2) Unconsolidated subsidiaries: 4
The unconsolidated subsidiaries, Nissho Insurance Services Co., Ltd., Nipro Asia Pte. Ltd., Nipro
Diabetes Systems, Inc. and Nipro Trading (Shanghai) Co., Ltd., are small-sized companies, whose
combined total assets, net sales, net income and earned surplus in the aggregate (averaged forrecent 5 years) are not material to the consolidated financial statements.
2. Application of Equity Method
Number of affiliate accounted for by the equity method: 1

Bipha Corporation

The equity method is not applied to the 4 unconsolidated subsidiaries, since they are not material
to the consolidated net income and earned surplus etc., either individually or in the aggregate.
3. Date of Interim Closing of Consolidated Subsidiaries
Among the consolidated subsidiaries, Nipro (Thailand) Corporation Ltd. (Thailand), Fuzhou Nipro
Co., Ltd. Nipro (Shanghai) Co., Ltd., Shanghai Nissho Vacuum Flask Refill Co., Ltd. (China), Nipro
Medical LTDA. (Brazil), Nipro Europe N.V. (Belgium), Nipro Medical Corporation (U.S.A.), Nipro
Medical Panama S.A. (Panama) and Nipro Medica de Mexico S.A. DE C.V. (Mexico) close theirinterim accounts on June 30. Significant transactions occurred between June 30 and September 30
are reflected properly in preparing for the consolidated financial statements.
4. Accounting Principles and Practices
1) Valuation standards and methods for significant assets
a. Securities
Other securities:
Securities with market quotations:
Valued at the market price quoted on the balance sheet date. Differences in valuation
are presented as a component of shareholders’ equity. Costs are determined by theweighted average method.
Securities without market quotations:
Valued at cost by the weighted average method
b. Inventories
Medical, Pharmaceutical and Glass & Materials Divisions:
Valued at cost principally by the weighted average method.
method is used.
Supermarket Division:
Valued at cost by the retail method- 15 -

Partially First-In First-Out

2) Method of depreciation and amortization for significant depreciable assets
Tangible fixed assets:
Declining-balance method
Durable years and residual values are based on the same standards as provided by the
Corporate Income Tax Law.
Buildings acquired after April 1, 1998 (excluding attached structures), are depreciatedby straight-line method.
The 9 foreign subsidiaries use straight-line method in accordance with the tax laws of
their countries.
3) Standards for recognition of significant allowancesa. Allowance for doubtful accounts:
In order to cover the probable losses on collection, an allowance for doubtful accounts isprovided for the estimated amount of uncollectible receivables. For general receivables, theamount of provision is based on historical write-off rates, and for the doubtful receivables,
based on the specific collectibility.
b. Accrued bonuses
In order to cover the payment of bonuses to employees, an allowance is provided for theestimated amount of bonuses to be paid, prorated for the consolidated accounting period.
c. Allowance for price reduction
An allowance is provided for the estimated amount of possible price reductions etc. for thesales of products.
d. Accrued pension and severance cost
An allowance is provided for employees pension and severance payments based on theestimated amounts of projected benefit obligation and plan assets at the end of the fiscal year.
The transitional difference that arose from the change in accounting standards (519 million
yen) is amortized for five years by the straight-line method.
Actuarial difference is expensed in the following fiscal years after the year of such recognition,using the straight-line method for five years.
4) Standards for translation of significant assets and liabilities denominated in foreign currencies into
Japanese Yen
Monetary assets and liabilities denominated in foreign currencies are translated to Japanese
yen using the spot exchange rate of the consolidated balance sheet date, and translationdifferences are recognized as gains or losses. The assets and liabilities of foreign subsidiaries
etc. are translated to Japanese yen using the spot exchange rate of their balance sheet date,
while revenues and expenses are translated using the average rate for the period. Translationdifferences are included in foreign currency translation adjustments in the Shareholders’ Equity
section.
5) Accounting method for lease transactions
Finance leases, except for those where ownership of the leased assets is deemed to betransferred to the lessee, are accounted for by the method similar to that applicable to ordinary
operating leases.
6) Other significant basis on preparation for consolidated financial statements
Consumption Taxes
Consumption taxes are excluded from revenues and expenses accounts.
5. Scope of Funds in the Consolidated Statements of Cash Flows
Funds (cash and cash equivalents) in the consolidated statements of cash flows are comprised of
cash in hand, bank deposits that can be withdrawn on demand, and short-term investments
redeemable within three months from the date of acquisition and ready to be converted into cash withlittle risk against change in value.

- 16 -

(Lease Transactions)
Finance lease transactions, except for those where ownership of the leased assets is deemed to betransferred to the lessee(Millions of Yen)
Six Months
Six Months
Fiscal Year
ended Sept. 30,
ended Sept. 30,
ended
2002
2003
March 31, 2003
Acquisition price equivalentBook value equivalent

9,272
4,243
5,028

9,116
5,117
3,939

9,687
4,772
4,915

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

1,521
4,349
5,870

1,428
3,205
4,633

1,477
4,022
5,500

Lease payments
Depreciation equivalentInterest expense equivalent

1,057
900
149

827
670
83

1,748
1,527
207

Accumulated depreciation equivalent

Method of calculation of depreciation equivalent
For the tangible fixed assets, ten ninth of the amount computed by the declining-balance methodwith 10% of hypothetical residual value for the lease term as remaining life is allocated to each period
over the lease term.
Method of calculation of interest equivalent
Difference between total lease payments and acquisition cost equivalent of leased assets
comprises interest expense equivalent, and interest expense equivalent is allocated to each period
over the lease term by the interest method.

- 17 -

(Segment information)
1. Segment information by business category(1) Six Months ended September 30, 2002 (From April 1, 2002 to September 30, 2002)
MedicalPharmaceutical

Glass &
Materials

Supermarket(1) Sales to third parties

38,273

10,054

5,323

34,948809(2) Inter-segment sales
and transfers

231

-

1,280

0

Total

38,504

10,054

6,604

Operating expenses

31,458

9,189

Operating income

7,046

864

(Millions of yen)
Eliminations/Corporate

Consolidated

89,408-89,408257

1,770(1,770)-34,948

1,067

91,179(1,770)89,408

5,722

34,263

911

81,545476

82,022

881

685

155

9,633

(2,246)

7,386

Other

Total

Net sales and operating
incomeNet sales(2) Six Months ended September 30, 2003 (From April 1, 2003 to September 30, 2003)
MedicalPharmaceutical

Glass &
Materials

Supermarket(1) Sales to third parties

37,745

11,893

5,637

36,110643(2) Inter-segment sales
and transfers

254

-

1,340

-

Total

37,99911,893

6,977

Operating expenses

32,55010,805

Operating income

5,449

1,088

(Millions of yen)
Eliminations/Corporate

Consolidated

92,029-92,029297

1,892(1,892)-

36,110941

93,922(1,892)

92,0296,090

35,778698

85,923428

86,351

887

331

242

7,999

(2,321)

5,678

Other

Total

Net sales and operating
incomeNet sales(3) Fiscal Year ended March 31, 2003 (From April 1, 2002 to March 31, 2003)
MedicalPharmaceutical

Glass &
Materials

Supermarket(1) Sales to third parties

76,00821,97911,06369,5591,758(2) Inter-segment sales
and transfers

534

-

2,473

0

Total

76,542

21,97913,536

Operating expenses

62,36819,997

Operating income

14,174

1,981(Millions of yen)
Eliminations/Corporate

Consolidated

180,369-

180,369

667

3,674

(3,674)-69,5592,425

184,044(3,674)

180,369

11,76068,4502,277

164,854615

165,470

1,776

1,109

147

19,189(4,290)14,899

Other

Total

Net sales and operating
incomeNet sales- 18 -

Note:

1.

Classification of business categories and main products in each business category
Business categories are classified based on the proximity in terms of purposes and manners
of usage of the products in the market.
Main products belonging to each business categories are as follows
Business
category

Main products

MedicalDialyzers, blood tubing sets, injection needles, syringes, and infusion sets, etc.

Pharmaceutical

Half-type and full-type kits, double-bag kits, pre-filled syringes, dialysate
solution, and circulatory drugs, etc.

Glass & Materials

Glass for pharmaceutical containers, glass for thermos bottles, glass forlighting purposes, stoppers for plastic containers and rubber stoppers, etc.

Supermarket

Fresh meat and fish, vegetables, fruits, processed food, daily foods, frozen
foods, general groceries and medicine, etc.

Other

Machinery for manufacture of medical equipment and real estate rental
income, etc.

2.

Operating expenses of “Eliminations/Corporate” for the six months ended September 30,
2002, 2003 and the previous fiscal year ended March 31, 2003 included unallocated corporate
costs of 2,246 million yen, 2,321 million yen and 4,290 million yen, respectively. The
unallocated corporate costs consisted primarily of the parent companies’ research anddevelopment costs and headquarters administration costs.

- 19 -

2. Segment information by geographical area
(1) Six Months ended September 30, 2002 (From April 1, 2002 to September 30, 2002)
Japan

America

Asia

Europe

Total(Millions of yen)
Eliminations/Corporate

Consolidated

Net sales and operating
incomeNet sales(1) Sales to third parties

83,520

2,206

2,785

896

89,408-89,408(2) Inter-segment sales
and transfers

4,624

221

29

4,340

9,216

(9,216)-

Total

88,144

2,428

2,815

5,236

98,625(9,216)

89,408Operating expenses

78,904

2,606

2,824

4,621

88,956(6,934)82,022

Operating income (loss)

9,240

(177)

(8)

615

9,688

(2,281)

7,386(2) Six Months ended September 30, 2003 (From April 1, 2003 to September 30, 2003)
Japan

America

Asia

Europe

Total(Millions of yen)
Eliminations/Corporate

Consolidated

Net sales and operating
incomeNet sales(1) Sales to third parties

86,005

2,090

3,019

913

92,029-92,029(2) Inter-segment sales
and transfers

4,677

175

0

4,304

9,158

(9,158)-

Total

90,683

2,266

3,020

5,217

101,188(9,158)92,029Operating expenses

82,796

2,558

3,271

4,486

93,113(6,761)86,351

Operating income (loss)

7,887

(292)

(251)

730

8,074

(2,396)

5,678(3) Fiscal Year ended March 31, 2003 (From April 1, 2002 to March 31, 2003)
Japan

America

EuropeAsia(Millions of yen)

Total

Eliminations/Corporate

Consolidated

Net sales and operating
incomeNet sales(1) Sales to third parties

168,847

4,544

5,360

1,617

180,369-

180,369(2) Inter-segment sales
and transfers

8,801

419

34

8,234

17,488(17,488)-

Total

177,648

4,963

5,394

9,851

197,858(17,488)

180,369

Operating expenses

159,549

4,710

5,239

8,966

178,467(12,996)

165,470

Operating income (loss)

18,098

253

154

884

19,391(4,492)

14,899

Note:

1.
2.

3.

Classification of countries or areas is based on geographical proximity.
The major countries included in each geographical area are as follows
America ……..
The United States of America and Brazil
Europe ………
Belgium
Asia ………….
China and Thailand
Operating expenses of “Eliminations and Corporate” for the six months ended September 30,
2002 and 2003, and the previous fiscal year ended March 31, 2003 included unallocatedcorporate costs of 2,246 million yen, 2,321 million yen and 4,290 million yen, respectively.
The unallocated corporate costs consisted primarily of the parent company’s research anddevelopment costs and the headquarters administration costs.

- 20 -

3. Overseas sales(1) Six months ended September 30, 2002 (From April 1, 2002 to September 30, 2002)
America1.

Overseas sales

2.

Consolidated net sales

3.

Percentage of overseas sales
against consolidated net
sales (%)

Europe

9,659

9,295

Asia

Total

2,839

10.8%

10.4%

America
Overseas sales

2.

Consolidated net sales

3.

Percentage of overseas sales
against consolidated net
sales (%)

3.2%

Europe

9,851

9,527

Asia

2.

Consolidated net sales

3.

Percentage of overseas sales
against consolidated net
sales (%)

Note:

1.
2.

3.

(Millions of yen)

2,732

22,111

92,029

10.7%

10.3%

America
Overseas sales

24.4%

Total

3.0%

(1) Fiscal Year ended March 31, 2003 (From April 1, 2002 to March 31, 2003)

1.

21,794

89,408(2) Six months ended September 30, 2003 (From April 1, 2003 to September 30, 2003)

1.

(Millions of yen)

Europe19,031

17,364

24.0%(Millions of yen)
Asia

Total

5,427

41,822

180,369

10.6%

9.6%

3.0%

23.2%

Classification of countries or areas is based on geographical proximity.
The major countries included in each geographical area are as follows
America ……..
The United States of America, Canada and Brazil
Europe ………
Belgium, Denmark and Germany
Asia ………….
China, Taiwan and Thailand
Overseas sales represent those of the Company and the consolidated subsidiaries tocountries and areas outside of Japan.

- 21 -

(Securities)
1. Other securities with market quotations(Unit: Millions of yen)
As of September 30, 2002

As of September 30, 2003

As of March 31, 2003

Acquisition cost

Carrying
value onconsolidated
B/S

Difference

Acquisition cost

Carrying
value onconsolidated
B/S

Difference

Acquisition cost

Carrying
value onconsolidated
B/S

DifferenceStock12,57319,196

6,622

12,41820,005

7,586

12,402

15,716

3,314

Bonds

-

-

-

-

-

-

-

-

-

Others

440

423

(16)

60

47

(12)

367

344

(23)

Total

13,013

19,6196,605

12,47820,052

7,574

12,76916,061

3,291

Classification(Note)

Impairment losses for the six months ended September 30, 2002 and 2003, and the previous
fiscal year ended March 31, 2003 were 383 million yen, 98 million yen and 628 million yen,respectively.
Impairment losses are recorded on the securities whose fair values at the end of the period
have declined by more than 50%, unless the values are reasonably considered to be
recoverable.

2. Securities that do not have market quotations
Carrying value on
Consolidated Balance
Sheet
As of Sept. 30, 2002
Held-to-maturity debt securities
Discount bank debentures
Other securities
Unlisted stock (excluding
those traded on theover-the-counter market)
Stocks of subsidiaries andaffiliates
Stocks of unconsolidated
subsidiaries
Stocks of affiliated companies
Total

Carrying value on
Consolidated
Balance Sheet
As of Sept. 30, 2003

(Unit: Millions of yen)
Carrying value on
Consolidated
Balance Sheet
As of March 31, 2003

14

-

-

1,584

4,437

4,573

186

186

186

6,512

5,710

6,197

8,297

10,334

10,957(Derivative transactions)
No transactions to be noted- 22 -

Production, Orders received and Sales
1. Production(1) Six months ended September 30, 2002 (From April 1, 2002 to September 30, 2002)(Unit: Millions of yen)
Business segment

Amount produced

Ratio against thesame period of theprevious fiscal year(%)

Medical29,174

4.6

Pharmaceutical

10,997

40.1

Glass & Materials

1,635(17.6)

Other

398

157.6

Total

42,206

11.4(2) Six months ended September 30, 2003 (From April 1, 2003 to September 30, 2003)(Unit: Millions of yen)
Business segment

Amount produced

Ratio against thesame period of theprevious fiscal year(%)

Medical28,201(3.3)

Pharmaceutical

12,664

15.2

Glass & Materials

1,835

12.2

Other

496

24.6

Total

43,1982.4(3) Fiscal Year ended March 31, 2003 (From April 1, 2002 to March 31, 2003)(Unit: Millions of yen)
Business segment

Amount produced

Ratio against thesame period of theprevious fiscal year(%)

Medical57,473

1.3

Pharmaceutical

23,126

42.1

Glass & Materials

3,396(14.4)

Other

1,239

94.7

Total

85,236

9.8

Note:

1.
2.
3.

Amounts produced are calculated based on average selling prices.
The above amounts are after eliminations of the intersegment transactions.
The above amounts do not include the related consumption taxes etc.

2. Orders received
Since we adopt the production system based on estimated orders, there is nothing applicable hereto
regarding the amount and the balance of orders received.

- 23 -

3. Sales(1) Six months ended September 30, 2002 (From April 1, 2002 to September 30, 2002)(Unit: Millions of yen)
Business segment

Amount sold

Ratio against thesame period of theprevious fiscal year(%)

Medical38,273

2.8

Pharmaceutical

10,05432.0

Glass & Materials

5,323

(4.5)

Supermarket

34,948

7.3

Other

809

1.4

Total

89,408

6.7(2) Six months ended September 30, 2003 (From April 1, 2003 to September 30, 2003)(Unit: Millions of yen)
Business segment

Amount sold

Ratio against thesame period of theprevious fiscal year(%)

Medical37,745(1.4)

Pharmaceutical

11,893

18.3

Glass & Materials

5,637

5.9

Supermarket

36,110

3.3

Other

643

(20.6)

Total

92,0292.9(3) Fiscal Year ended March 31, 2003 (From April 1, 2002 to March 31, 2003)(Unit: Millions of yen)
Business segment

Amount sold

Ratio against thesame period of theprevious fiscal year(%)

Medical

76,008(2.0)

Pharmaceutical

21,97937.8

Glass & Materials

11,063(1.5)

Supermarket

69,559

7.4

Other

1,758

3.4

Total

180,369

5.3

Note:

1.
2.

The above amounts are after eliminations of the intersegment transactions.
The above amounts do not include the related consumption taxes etc.

- 24 -

Summary of Non-consolidated Financial Statements

November 25, 2003

For the Six Months Period ended September 30, 2003 (Fiscal Year ending March 31, 2004)
Company name: NIPRO CORPORATIONTokyo and Osaka
Stock Exchange where listed:
Code No:
8086
Head Office:Osaka, Japan(URL: http://www.nipro.co.jp/)
Representative:
Minoru Sano, President and Representative Director
Contact:
Akihiko Yamabe, Director, General Manager of
TEL (06) 6372-2331
Accounting Division
Date of the meeting of theInterim dividend plan: Adopted
Board of Directors for approvalof the financial statements:
Date of commencement of
payment of interim dividends:

Unit share system:

November 25, 2003

Adopted (1,000 shares/unit)

December 10, 2003

1. Results for the Six Months ended September 30, 2003 (From April 1 to September 30, 2003)(1) Results of Operations(Note: Amounts are rounded off per one million yen)
Net Sales
Operating Income
Recurring Income
Six months ended Sept. 30, 2003
Six months ended Sept. 30, 2002
Year ended March 31, 2003

Millions of yen%

Millions of yen%

Millions of yen%

50,57949,566100,664

2.0
(9.6)

3,853
5,098
10,238(24.4)
9.6

2,990
4,450
8,851

(32.8)
12.6

Net Income
Millions of yen

Earnings per Share
%

Yen

1,400
(44.5)
22.00
2,525
13.5
43.89
4,105
67.82
Notes: 1. The weighted average number of shares outstanding for the six months ended September 30, 2003, 2002 and forthe fiscal year ended March 31, 2003 was 63,639,242 shares, 57,535,917 shares and 58,949,626 shares,
respectively.
2. Change in accounting method: N/A
3. Percentages in the above table for Net Sales, Operating Income, Recurring Income and Net Income representchanges from the corresponding period of the previous fiscal year.
Six months ended Sept. 30, 2003
Six months ended Sept. 30, 2002
Year ended March 31, 2003

(2) Dividends
Interim dividendper Share

Annual dividendper Share

Yen
Six months ended Sept. 30, 2003
Six months ended Sept. 30, 2002
Year ended March 31, 2003

Yen

11.00
21.00
-

32.00

(3) Financial Position
Shareholders’EquityTotal Assets
Millions of yen

Millions of yen

Ratio of Shareholders’Equity to Total Assets%

Shareholder’ Equity
per ShareYen

239,053
97,68840.9
1,535.27
223,137
90,62040.6
1,513.64
225,456
94,84442.1
1,488.50
Notes: 1. The number of shares outstanding as of September 30, 2003, 2002 and March 31, 2003 was 63,629,277 shares,
59,869,373 shares and 63,645,860 shares, respectively.
2. The number of treasury stock as of September 30, 2003, 2002 and March 31, 2003 was 249,228 shares, 109,818
shares and 232,645 shares, respectively
Six months ended Sept. 30, 2003
Six months ended Sept. 30, 2002
Year ended March 31, 2003

2. Projections for the Results for the Fiscal Year ending March 31, 2004 (From April 1, 2003 to March 31,
2004)
Net Sales
Millions of yen

Year ending March 31, 2004

Recurring Income

Net Income

Millions of yen

Millions of yen

8,000

4,100

103,000

Annual dividend per Share
Year-end
Dividend
Yen
Yen

20.00

31.00

(Reference) Projected Earnings per Share for the Fiscal Year ending March 31, 2004: 62.74 yen*

The projections shown above are prepared based on information available as of the issuing date of thisreport. The actual results may differ from the projected figures due to various factors. Concerning
the matters related to the above projections, please refer to the Page 8.
- 25 -

Balance Sheets

PeriodAccount

As of
September 30, 2002
AmountRatio(ASSETS)
Current Assets
Cash on hand and in banks

Trade notes receivable
Accounts receivable
Inventories
Deferred tax assets
Other current assets
Allowance for doubtful
accounts
Fixed Assets
Tangible fixed assets
Buildings
Machinery and equipment

Land
OthersIntangible fixed assets

As of
September 30, 2003
AmountRatio%
91,69041.1(Unit: Millions of yen)
As ofMarch 31, 2003
AmountRatio%
96,72940.5%
86,892

27,16914,322
25,111
17,390900
6,858

35,41015,35024,321
18,748526
2,376

20,244
14,81627,275
17,915
895
5,808

(62)

(5)

(64)

38.5

131,44658.9

142,32459.5

138,564

61.5

33,53915.0

32,81813.7

33,415

14.8

11,224
7,474
12,4402,399

10,874
6,728
12,4402,775

11,391
7,454
12,440
2,128

339

0.2

271

0.1

302

0.2

Investments and other assets

97,56843.7

109,23345.7

104,84546.5

Investment securities

20,041

23,00919,56551,55851,55851,558

10,766

10,79010,766

8,317
7,420

17,6106,749

16,183
7,302

(537)

(485)

(531)

Investment in subsidiaries
and affiliates - stock
Investment in subsidiaries
and affiliate – other thanstock
Long-term loans
receivable

Other assets
Allowance for doubtful
accounts
Total Assets

223,137

100.0- 26 -

239,053

100.0

225,456100.0

Balance Sheets

PeriodAccount

As of
September 30, 2002
Amount(LIABILITIES)Current liabilities
Trade notes payable

Accounts payable
Short-term borrowings
Current portion of bonds
Current portion of convertible
bonds

Income taxes payable
Accrued bonuses
Allowance for price reduction
Commercial paper
Other current liabilities

Noncurrent liabilities
Bonds

Ratio

As of
September 30, 2003
Amount%82,971

37.2

Ratio

(Unit: Millions of yen)
As ofMarch 31, 2003
Amount%61,27325.6%
65,24914,422
10,303
21,397
15,00014,17910,914
23,622-

13,736
10,90623,125
2,000

6,120
1,845
1,228
936
7,000
4,717

965
974
6,500
4,118

1,660
803
1,359
7,000
4,657

49,54522.2

80,091

33.5

Ratio

65,36328.9

29.0

30,00036,00036,00015,656
1,751

14,00025,988
1,671

26,996276

Lease deposits received

1,193
944

1,461
970

1,163
926

Total liabilities

132,51759.4

141,36459.1

130,61257.9

25,66026,976
26,97634,753
1,196
30,597
2,959

11.5
12.1

12.0
12.6
14.9

28,66329,972
29,97235,076
1,196
30,597
3,282

12.7
13.3

15.6

28,66329,972
29,97235,6691,196
32,732
1,740

3,437
(208)

1.5
(0.1)

3,866
(482)

1.6
(0.2)

1,583
(451)

0.7
(0.2)

Total shareholders’ equity

90,62040.6

97,68840.9

94,844

42.1

Total liabilities and shareholders’equity223,137100.0

239,053

100.0

225,456

100.0

Convertible-bond-type bonds
with stock acquisition rights

Long-term borrowings
Deferred tax liabilities
Accrued pension andseverance cost

(SHAREHOLDERS’ EQUITY)

CapitalCapital surplus
Capital reserve
Earned surplus
Revenue reserve
Voluntary reserve
Unappropriated income
Valuation differences of othersecurities

Treasury stock- 27 -

15.6

Statements of Income
PeriodAccount

From April 1, 2002
To September 30, 2002
AmountFrom April 1, 2003
To September 30, 2003

Ratio

Amount

Ratio%(Unit: Millions of yen)
From April 1, 2002
To March 31, 2003
Amount

Ratio

%

%

Net sales
Cost of goods sold49,56636,671100.0
74.0

50,57938,583100.0
76.3

100,664
75,121

100.0
74.6

Gross profit

12,89426.0

11,996

23.7

25,543

25.4

Selling, general andadministrative expenses

7,796

15.7

8,142

16.1

15,304

15.2

Operating income

5,098

10.3

3,853

7.6

10,23810.2

Non-operating income

749
81
598

1.5

446
148
87

0.9

1,011
185
676

1.0

Interest income
Dividend income
Gain on sale of investment
securities
OthersNon-operating expenses
Interest expenses
Interest on bonds
Exchange loss
OthersRecurring income
Extraordinary gains
Extraordinary losses
Loss on sales and disposals
of fixed assets
Loss on devaluation of
investment securities
Loss from bad debts
Compensation for breach ofcontract
Others
Net income before
adjustment of taxes
Corporate, inhabitants andenterprise taxes
Adjustment for deferred taxes

69
1,398
155
576
658
6
4,450
33
633

9.0

139
70
1,310
215
453
552
88
2,990

0.1
1.3

138
585

2.8

5.9

149
2,398
356
1,047
879
114
8,851

8.8

0.3
1.2

108
1,993

0.1
2.0

2.6

25

195

196

383
-

98
290

605
-

214
8

1

1,178
13

2.4

3,851

7.8

2,542

5.0

6,966

6.9

1,732
(406)

3.5
(0.8)

932
210

1.8
0.4

3,336
(475)

3.3
(0.5)

Net income
Retained earnings at the
beginning of the period
Interim dividends paid

2,525

5.1

1,400

2.8

4,105

4.1

434
-

339
-

434
1,257

Unappropriated income

2,959

1,740

3,282

- 28 -

Basis of Preparation for the Interim Financial Statements
1. Valuation standards and methods for significant assets
a. Securities
Stocks issued by subsidiaries and affiliated companies
Valued at cost by the weighted average method
Other securities:
Securities with market quotations:
Valued at the market price quoted on the balance sheet date. Differences in valuation
are presented as a component of shareholders’ equity. Costs are determined by theweighted average method.
Securities without market quotations:
Valued at cost by the weighted average methodb.

Inventories
Merchandises, Finished goods and Semi-finished goods:
Valued at cost by the weighted average method
Raw materials and Supplies:
Valued at cost by the First-In First-Out method

2. Method of depreciation and amortization for significant depreciable assets
Tangible fixed assets:
Declining-balance method
Durable years and residual values are based on the same standards as provided by the
Corporate Income Tax Law.
Buildings acquired after April 1, 1998 (excluding attached structures), are depreciatedby straight-line method.
Intangible fixed assets
Straight-line method
Durable years are based on the same standards as provided by the Corporate Income
Tax Law.
However, the software for internal use is amortized by the straight-line method for theperiod during which it is available in the Company (5 years).
3. Standards for recognition of significant allowances(1) Allowance for doubtful accounts:
In order to cover the probable losses on collection, an allowance for doubtful accounts is provided
for the estimated amount of uncollectible receivables. For general receivables, the amount ofprovision is based on historical write-off rates, and for the doubtful receivables, based on thespecific collectibility.
(2) Accrued bonuses
In order to cover the payment of bonuses to employees, an allowance is provided for the estimatedamount of bonuses to be paid, prorated for the consolidated accounting period.
(3) Accrued pension and severance cost
An allowance is provided for employees pension and severance payments based on the estimatedamounts of projected benefit obligation and plan assets at the end of the fiscal year.
The transitional difference that arose from the change in accounting standards (147 million yen) is
amortized for five years by the straight-line method.
Actuarial difference is expensed in the following fiscal years after the year of such recognition,using the straight-line method for five years.
4. Accounting method for lease transactions
Finance leases, except for those where ownership of the leased assets is deemed to betransferred to the lessee, are accounted for by the method similar to that applicable to ordinary
operating leases.
5. Other significant basis on preparation for consolidated financial statements
Consumption Taxes
Consumption taxes are excluded from revenues and expenses accounts.

- 29 -

Notes to the Interim Financial Statements(Balance Sheet)(Millions of yen)
As of
September 30, 2002

As of
September 30, 2003

43,20345,00044,390

Buildings

7,112

5,773

6,010

Land

3,932

2,714

2,714

3. Obligations under guarantee contracts

21,42017,62922,922

4. Obligations as a co-surety

2,187

1,979

2,083

5. Notes receivable discounted

26

8

35

6. Number of treasury stock

109,818 shares

249,228 shares

232,645 Shares

1. Accumulated depreciation of tangible
fixed assets

As ofMarch 31, 2003

2. Pledged assets(Statement of Income)(Millions of yen)
From April 1, 2002
From April 1, 2003
To September 30, 2002 To September 30, 2003

From April 1, 2002
To March 31, 2003

Amount of depreciation
Tangible fixed assets

1,453

1,451

3,178

Intangible fixed assets

50

44

98

Net Sales by Division and the Proportion to the Total(Millions of yen)
PeriodSegment

From April 1, 2002
To September 30, 2002
AmountFrom April 1, 2003
To September 30, 2003

Ratio

Amount%

Ratio

From April 1, 2002
To March 31, 2003
Amount%

Ratio%

Medical Division

37,16775.0

36,46872.1

73,48573.0

Pharmaceutical Division

5,694

11.5

7,252

14.4

13,08913.0

Glass & Materials Division

5,289

10.6

5,727

11.3

10,942

10.9

Other

1,415

2.9

1,131

2.2

3,147

3.1

Total

49,566100.0

50,579100.0

100,664

100.0[Exports, inclusive][15,905]

32.1[16,086]31.8[30,300]

30.1- 30 -

(Lease Transactions)
Finance lease transactions, except for those where ownership of the leased assets is deemed to betransferred to the lessee(Millions of Yen)
Six Months
Six Months
Fiscal Year
ended Sept. 30,
ended Sept. 30,
ended
2002
2003
March 31, 2003
Acquisition price equivalentBook value equivalent

910
579
330

885
555
330

910
595
315

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

169
278
447

172
273
446

171
272
443

Lease payments
Depreciation equivalentInterest expense equivalent

104
83
6

101
82
5

208
191
12

Accumulated depreciation equivalent

Method of calculation of depreciation equivalent
For the tangible fixed assets, ten ninth of the amount computed by the declining-balance methodwith 10% of hypothetical residual value for the lease term as remaining life is allocated to each period
over the lease term.
Method of calculation of interest equivalent
Difference between total lease payments and acquisition cost equivalent of leased assets
comprises interest expense equivalent, and interest expense equivalent is allocated to each period
over the lease term by the interest method.

(Securities)
As of September 30, 2002, 2003 and March 31, 2003, there was no stock issued by subsidiaries oraffiliated companies that have market quotations.

- 31 -