Annual Report 2014
Year Ended March 31, 2014

Contents
1
5
9
10
11
15
17
19
21
25
27
29
30
31
32
47
48

Introduction
A Message to Our Shareholders and Investors
Board of Directors and Auditors
Consolidated Financial Highlights
Special Edition
Global Activities
Research and Development
Status of Corporate Governance
Financial Review
10 Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statement
Report of Independent Auditors
Corporate Information

1 Nipro Corporation Annual Report 2014

Disclaimer regarding Forward-looking Statements
This report contains forward-looking statements regarding business indices,
strategies and performance representing the expectations and judgments of the
management, based on information available to the Company and publishable
at the time this report was prepared.
When reading this report, please understand that forward-looking statements
involve potential risks and uncertainties; actual future business performance andforecasts may therefore differ materially from those contained in thesestatements, given the possible emergence of new factors or changes in
economic circumstances and/or the business environment.

To Become a Truly Global
Multidisciplinary Medical Manufacturer
Since its establishment in 1954, Nipro has expanded its business from glassmaterials to medical devices and pharmaceutical products, based on our corporate
management philosophy “to contribute to society through its business activities”
and our concept of technological innovation. We provide products and technologies
in a wide range of fields to meet the needs of patients and medical professionals.
The aim of Nipro now is to become a truly global and multidisciplinary medical
manufacturer that can fulfill the desire of people of the world, having different
cultures, customs and lifestyles, “to lead a healthy life”. Our mission therefore is to
strive earnestly to create new value from a “user-focused” unwavering attitude of
how to contribute to medical services on a global scale.

Nipro Corporation Annual Report 2014 2

Nipro’s Sttrengtth — A “Trinity” Bussiness Model
off Nip
ipro
ro’s’s bus
usin
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ess.
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urrtthe
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u iq
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tren
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alss anand gandgllassass prasp od
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Ma
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d ide
eas.
eas

3 Nipro Corporation Annual Report 2014

Medical-Related
M
edical-R
RelatedBusiness
Business
Ou
Our
O
ur di
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p od
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We havehavee carved
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arkkete
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DialysisDDialysis prod
products
ducttsPharmaceutical-Related
Business

Glass-Related
Business

As the largest contract manufacturer groupin Japan, we have made progress throughmarketing distinctive products. We also
contribute to safety and user-friendliness inthe medical field by developing
pharmaceutical kit products that combine
our technology and knowledge of both
medical products and pharmaceuticals.

We produce high-performance andhigh-quality glass for use in the medical
field, as well as physical and chemical
sciences and industry. We also sellheat-resistant, impact-resistant andchemically durable glass, andhigh-precision glass for medical andindustrial use.

Kit prKitppreparation
eparrra
ep
epa
rat
at
atio
on

Glass products

Nipro Corporation Annual Report 2014 4

A Message to Our Shareholders and InvestorsAnAn enterpriseenterprise that
that
contributes tocontributes
toglobal h
globalhealthcare
ealthcare w
withitha ssense
ense ofof purpose
purposeYoshihiko Sano
President

5 Nipro Corporation Annual Report 2014

Achieving consolidated net sales of
300 billion yen
We could fortunately exceed consolidated net
sales of 300 billion yen in this fiscal year, an
increase of about 60 billion yen from theprevious year. The domestic economic
environment of Japan was a factor that
contributed to this. In general, the medical fieldis relatively unaffected by market fluctuations.
Nevertheless, the weaker yen brought about by
economic policies of the government resulted ina major rise in export profitability, which
boosted our profits.
Needless to say, the active efforts of theCompany made a major contribution to sales.
Last year in particular, in addition to enrichmentof the product line, Goodman Co., Ltd. which
has a prominent market share of cardiac
catheters became our subsidiary, followed by
Nichihos Co., Ltd. which has 24 dispensing
pharmacies. The synergistic effect of thesesubsidiaries was also a major factor in increasing
sales.
The sales target was achieved, but all of us
at the Nipro group will continue to makeconcerted efforts to reach our long-term
management goal of achieving “consolidated
net sales of 500 billion yen in fiscal 2020 and
1 trillion yen in fiscal 2030”.
In this fiscal year, the first year of profit
structuring, we at the Nipro group madeearnest efforts to improve the Company’s profit
structure and succeeded in increasing the grossprofit to sales ratio for the second successive
year. However there are some unresolved issues
and we will continue further strengthening of
the profit structure in the current year also.

Establishing a Global Production Divisionand making overseas plants profitable

We therefore set up the Global Production
Division on April 1, 2014 to make overseas
plants profitable and have a solid profit
structure. The new division will identify problem
areas in the concerned overseas plants using as
benchmarks the approaches to production andmanagement techniques used at the Odate
plant, the mother plant. At the same time,
inputs for improvements will be provided by the
Production Technology Center which has
handled the development of numerous mass
production machines and has been looking after
the mass production technologies of theCompany so far. Through such activities we will
be pursuing standardization and profit
structuring of our production bases across theworld and consolidating the position of the
Nipro brand in the global market.

Increasing product value
The only way a private company can continue toexist and grow is to enhance the value of its
products. For this it is very important to seek theopinions of medical professionals.
Many medical care workers feel that they are
exposed to the risk of medical accidents in their
day-to-day work. In our opinion, improvementof product value means to provide user-focused
products that would cause fewer medical
accidents, designed based on cases ofpoint-of-care accidents. Through such efforts
we hope that the users would recognize betterthe product value of the Nipro brand.

Transition and Plan for Consolidated Net Sales(Millions of yen)
600,000

The Nipro group which has been globalizing its
business has actively pursued overseas
expansion of manufacturing bases under its
management policy of “local production for
local consumption”. At the same time, someprofitability-related and other issues are now
becoming apparent.

500,000

500,000
400,000
300,000
200,000

300,753
195,943 212,013

241,021100,000

2010 2011 2012 20132020 (FY)

Nipro Corporation Annual Report 2014 6

Expanding the area of businessWe have been pursuing business activities byleveraging the strength of Nipro’s trinity
business model which comprises the medical
devices, pharmaceuticals and glass products
businesses. Our medical devices are of 3 types,
i.e., disposable devices, electronic equipment
and testing and diagnostic kits. These will beseparately handled in the future to make 5business areas. Later we intend to add cell
medicine and medical equipment that utilizes
physical force, to make total of 7 business areas.
At the end of last year, we established Nipro
Amtes Co., Ltd. as a medical equipment unit of
the group. We also made Cell Science &Technology Institute, Inc. one of our subsidiaries
in March end to make a cell medicine unit.
These are strategic moves for expansion of ourbusiness areas and will become the foundation
for achieving consolidated net sales of 500 billion
yen in fiscal 2020.

A team-based creative way ofworking
Opening of the “iMEP” training facility
for medical professionals this fall
Hospitals generally adopt various measures like
TQC (*1), standardization, infection prevention,and safety measures to prevent medical
accidents. We believe that making users
thoroughly understand the product before use,so that no medical errors occur while using a
Nipro product, is also a part of the productvalue.
Nipro therefore decided to set up a training
facility where doctors, nurses and medical
technologists can learn the relevant technology
and skills. This is for preventing medical
accidents by making them acquire a goodunderstanding of the Nipro products. We will
gather the opinions and impressions of the
medical professionals while they undertake thetraining and feed the information back to
product development to make our products andservices more user-focused.

It is not easy to make a staff member
well-trained both in dialysis and interventional
medicine (*2), for instance. This is because thetechnology involved in these two fields is very
different. Moreover, the desired treatments andproduct specifications also differ depending on
the country and region.
We consider it appropriate under thesecircumstances to assign teams rather than
individuals to deal with specific issues. Creative
responses to wide ranging needs and seed ideas
will be possible only by deploying organic andmobile teams where several individuals withexpert knowledge cooperate closely.
We firmly believe that we will get grateful
smiles from medical professionals and patients if
our products and services are of higher value
than those of others. This would become areason to work at Nipro and tens and even
hundreds of such teams would be created. Thisin turn, I am sure, would lead to enhanced
market share and increased sales.

( 1) TQC: Company-wide application of quality management principles to all areas of business from design to delivery. In the case of hospitals, it*

refers to continuous improvement of work done by the frontline staff, and management and improvement of the quality of medical care,including service to patients and safety of the treatment.

( 2) Mainly the method of treating the affected area by inserting a thin tube called a catheter through a few mm diameter hole made in the skin.
*

7 Nipro Corporation Annual Report 2014

FISH Philosophy and profit
distribution
We are trying to newly incorporate FISH
Philosophy to Nipro whose motto since its
establishment has been “will”. This philosophy
was born in a fish market of Seattle. In essence
it is the idea of creating joy at work andcustomer satisfaction and maintaining these sothat workers enjoy doing their job andcustomers are more satisfied, all of which
generates repeat business.
If we view work more positively andcreatively, the entire work force will do theirwork in a more enjoyable way with a sense ofinclusiveness, and this would satisfy and inspire
the customers. We wish to develop our businessin such an atmosphere.
At the same time, it is necessary to improve
the precision of the “profit distribution” system
and adjust the balance to create an environment
where the employees do their work eagerly andvoluntarily. We will gradually perfect a system
where the remuneration of each employee isdetermined not by the employee’s designation
or rights but by the results, i.e., the value
created by him or her by making a product orservice more useful for the customer.

Returning profits to the shareholders,
one of our key business policies
Nipro has been paying dividend to shareholders
by positioning the return of profits as animportant management policy. Retained
earnings of the Company will be actively
invested in the research and development
division, in addition to the sales division andproduction division, as a part of expansion of
the business base and long-term businessdevelopment in order to ensure stable profit andachieve continued growth.
Based on this dividend policy, we disbursed
16 yen per share as interim dividend, and 14.5
yen per share as year-end dividend, which madethe annual dividend from the surplus for the
fiscal year 30.5 yen per share.
This basic policy of dividend disbursal willcontinue in the next year. The exact dividend

will be decided, balancing it against the internal
reserves required in view of the expected
increase in the demand for funds, etc.

Entering the field of health therapy,
which prolongs health expectancy
Japan is one of the world’s leading countries forlongevity. However, in the future, healthexpectancy will receive more attention than thesimple average life expectancy. Such a shift
would be a global theme, not just in advanced
countries including Japan. Nipro is therefore
planning to expand its view to cover preventive
medicine and health medicine also to contributeglobally to health therapy that enhances healthexpectancy. This move would make the aim ofachieving consolidated net sales of 1 trillion yen
in 2030 more realistic.

Becoming a blessing to people theworld over
Each type of treatment in today’s clinicalpractice requires unique and high leveltechnology. The technology is renewed almost
on a daily basis for further improvement inresponse to new needs. Under thesecircumstances Nipro will continue to establish
unwaveringly user-focused and patient-focused
proprietary technologies, and systems andorganizations. We will thus strive to become, by
our contributions to people’s health the world
over through our products and services, anenterprise that people would consider a blessing.
As ever, I would like to express my sincere
gratitude to all our shareholders and investors
who have supported us and seek their continued
long-term support.

July 2014

Yoshihiko Sano
President

Nipro Corporation Annual Report 2014 8

Board of Directors and Auditors

President & Representative Director

Managing Directors

Makoto Sato

Kazuo Wakatsuki

Kiyotaka Yoshioka

Toshiaki Masuda

Yoshihiko Sano

Kyoetsu Kobayashi
Directors

Akihiko Yamabe

Itsuo Akasaki

Kenju Fujita

Mitsutaka Ueda

Kazuhiko Sano

Yoshiko Tanaka (External Director)

Tsuyoshi Yamazaki

Akio Shirasu

Hideo Okamoto

Hiroshi Yoshida

Masanobu Iwasa

Hiroshi Sudoh

Yozo Sawada

Takeo Kikuchi

Kimihito Minoura

Kenichi Nishida

Hideto Nakamura

Toyoshi Yoshida

Statutory Auditors

Yasushi Kutsukawa

Kouki Hatakeyama

Kazumichi Irie

Masayuki Ito

Yasushi Ohyama

Masayoshi Hasegawa

9 Nipro Corporation Annual Report 2014

Standing Statutory Auditor

Takayuki Nomiya

Consolidated Financial Highlights

Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31, 2014 and 2013

Thousands of
U.S. dollars

Millions of yen

2014

For the year:

2013

2014

Net sales ......................................................................

¥ 300,753

241,021$ 2,922,202

Operating income ........................................................

12,29011,371

119,413

Net income ..................................................................

2,861

10,232

27,798

Capital expenditures ....................................................

35,09337,997

340,974

Depreciation and amortization .....................................

25,151

21,210244,374

R&D Expenses ..............................................................

7,891

6,464

76,671

579,302$ 6,020,744

128,763

1,321,036¥

At the year-end:
Total assets ..................................................................

¥ 619,655

Net assets ....................................................................

135,961¥

Per share data (in yen and U.S. dollars)
Net income:Basic .......................................................................

¥

18.2

¥

$

60.0

0.18

Diluted ....................................................................

16.3

54.1

0.16

Cash dividends ............................................................

30.5

27.5

0.30

Equity ..........................................................................

832.1

703.5

8.09

■ Net Sales (Millions of yen)

■ Operating Income (Millions of yen)

350,000

300,753

280,000

210,000

20,000241,021
177,830

195,943

25,00010,00070,000

5,000

2011

17,225

15,82515,000140,000

2010

18,094

212,013

2012

2013

2014

2010

2011

2012

■ Net Income (Millions of yen)

■ Return on Equity (%)

12,000

10.0

8,000

8.0

12,290

2013

2014

8.9

10,232
10,00011,371

6.9

7,253
6.0

6,000

4.2

4,586
4.0

4,000

2.3

2.2

2,861

2,456

2.0

2,000

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

Nipro Corporation Annual Report 2014 10

Special Edition

IItt isis important thatthe production
thedivisionis alsodiv
div“user-focused”.
““usus

Kyoetsu Kobayashi
Managing Director

Global Production Division launchedon April 1
Overseas business, including production plants,
has so far been overseen by Global Business
Division which is mainly sales-oriented. However,sales activities are inadequate for the transfer, tothese production sites, of all the production
technology and know-how that Nipro has
nurtured until now. Global Production Division
was set up because it was felt that guidance by
persons well-versed in manufacturing was needed.
Before describing the details of the activities
of Global Production Division, I shall give a brief
account about a committee for plant
management formed the year before last.
This committee for plant management is oneof several committees set up to provide horizontal
linkages in the corporation in addition to theexisting vertical divisional structure. The purposeof this committee is for the top managers andexecutives of different plants to deliberate on
various issues concerning production technology
in relation to quality control, cost reduction,
stable supply, etc., and to exchange informationand technology. The committee has been working
to establish a Nipro brand of even higher quality
by sharing the concepts of manufacturing among
all the plants.
The objective of setting up Global Production
Division was to create global scale production
11 Nipro Corporation Annual Report 2014

technologies and the constituents of the Niprogroup working together as one, relying also on
information and technologies shared through thecommittee for plant management.

Making overseas plants profitable
Kazuhiko Sano, director of Production Technology
Center, who has expert knowledge about
production equipment, and I, the manager of the
Odate plant, lead a team of Global Production
Division that visits each plant, identifies issues
concerning quality, cost, equipment, etc. andgives instructions for adopting remedial measures.
The staff members at each production site thenwork for improvement on the basis of these
instructions.
Another objective of Global Production
Division is to improve the profit structure of ouroverseas plants to the level of our mother plant.
In the case of medical devices, for instance, themother plant at Odate and Nipro Medical
Industries Co., Ltd. have common concepts andapproaches towards profit and product quality.
Our plan is to raise the newly opened overseas
plants also to a similar level of profitability as themother plant. For this, we will transfer know-how
and management techniques for highly
productive manufacturing, while simultaneously
reviewing the equipment used for production.

By supporting both these soft and hard aspects ofstarting up of new plants, we will be creating
systems that can ensure Nipro brand products ofidentical quality from any of our plants in theworld while simultaneously realizing rapid
improvement in the profitability of new overseas
plants.
We intend to establish the foundations ofproper manufacturing technology, first with plants
in India and then plants in Indonesia, Bangladesh,and Hefei in China.

“People”are the key“People” who work at the plant are the key tomaking an overseas plant profitable, we believe.
Nipro’s overseas plants have advanced equipment,
but more important are the ways of thinking andthe awareness of people who use the equipment.
How to train them is the question.
We start by conveying Nipro’s approach to
manufacturing. When we explain Japan’sthorough management techniques, the local
workers initially show a confused response. We
then explain until they understand. It is our viewthat they embark voluntarily on making
improvements and show inventiveness only when
their ways of thinking and awareness are alteredin this manner.

Manufacturing with a user-focused
approach
A high quality product with excellent productivity
is not always highly appreciated in the clinicalsetting. I came to realize this after our president
Yoshihiko Sano mentioned about theuser-focused approach.
The president also pointed out the difference
between user friendliness-centric specifications
and the final product specifications. The former
are those decided by the product technology
development division after a product is plannedon the basis of the needs of the users as identified
by sales personnel and the latter are those
finalized by the production division after
establishing the production technology for theuser friendliness-centric specifications received
and factoring in stable supply, etc.
If the user friendliness-centric specifications
based on the needs and seed ideas of patientsand medical professionals are changed in theplant by giving priority to high productivity andcost reduction, there is a danger of theuser-friendliness, etc. of the product being
sacrificed. This approach lacks “user-focus”.

Therefore, we decided to hold regularmeetings between the production division andoperations division for exchange of views.
A sample of the product is made in the plant after
receiving requests from medical professionals.
The sales personnel then get feedback frommedical personnel about the sample, which isreflected in the final product specifications.
The user-focused approach is incorporated in
manufacturing in this way.

Taking plant managers to actual
clinical settings
Another new scheme that we have started thisyear is to make executives of Odate plant toparticipate in sales training. They visit hospitals
along with sales personnel to directly see whether
the products of the Company are used in amanner envisaged in the product specifications
and whether their user-friendliness is properly
appreciated in the busy clinical setting. We believethat such first-hand experience also is an
important foundation for user-focused
manufacturing.

Delivering to the world productsthat are well-tuned to user’s needs
The immediate objective of the production division
is to make the overseas plants profitable. We shallwork to the best of our ability in the future also toadvance standardization of the production setup
and management of all the plants, Global
Production Division taking charge so that theplants would shift to a profit-generating structure.
At the same time, we will establish the Nipro wayof user-focused manufacturing throughcollaboration with other divisions including theoperations division and deliver to the world
products closely tuned to the needs of users.

Nipro Corporation Annual Report 2014 12

Our efforts in regenerative medicine

Market expansion and intensified global competition are anticipated in the near future in the field of regenerative
medicine using stem cells such as iPS cells. Accordingly, Nipro has been actively collaborating with universities andother research institutions to develop a variety of devices that are required in the field of regenerative medicine.

Patent license agreement for commercialization of“the first cell-based drug in Japan in the field of regenerative medicine”
In April 2014, Nipro entered into a license
agreement with Sapporo Medical University for
their patent on “autologous bone marrowmesenchymal cells for the treatment of cerebral
infarction and spinal cord injury” in order for all
patients to benefit from their researchachievements. We aim to manufacture andmarket regenerative medicine products, which are
anticipated to be covered by health insurance.
Sapporo Medical University has been
conducting studies aiming to realize cell-based
therapies for regenerative medicine, andinvestigator-initiated clinical trials got underway
for cerebral infarction patients last February andfor patients with spinal cord injury lastDecember. Under the joint research agreement
between Sapporo Medical University and Nipro,
we deployed several of our research investigators
to the university last April and have beendeveloping manufacturing methods and various
devices to promote large-scale production andcommercialization of standardized cell-based
therapeutic products with stable quality.
Under the licensing agreement Nipro would
be responsible for developing purely indigenous
cell-based therapeutic products based on thenovel research achievements of Sapporo Medical
University, as well as for manufacturing andmarketing the regenerative medicine products inaccordance with the Pharmaceutical Affairs Law.
Mesenchymal stem cells
Mesenchymal stem cells are stem cells that arecapable of differentiating into various types ofcells, which constitute nerves, blood vessels,cardiac muscles, and other tissues. In our strategy

13 Nipro Corporation Annual Report 2014

for regenerative medicine, mesenchymal stem
cells derived from the patient’s own bone marrow
are used to repair damaged cranial nerves, bloodvessels, and central nerves. The expected results
include an improvement in the neurologicalsymptoms and functional impairments whicharise as sequelae after cerebral infarction or spinal
cord injury, as well as a reduced requirement for
nursing care.

Collection of bonemarrow aspirate

Isolation of stem cells
from bone marrowaspirate

Intravenous
infusion

Culturing for expansion
g Large-scale culture

Preparation ofcell-based drug

Freezing
g Quality inspection
g Storage

Special Edition

About the patent
The patent relates to the treatment by which
mesenchymal stem cells derived from the bonemarrow of patients are expanded in vitro up to
about 10,000-fold, and given back to patients
through an intravenous infusion. This is arevolutionary treatment that can reduce theburden on patients, requiring no surgicalprocedures and risking fewer adverse reactions
due to the use of autologous cells.

Nipro, in collaboration with Sapporo Medical
University, focuses on the effort to expand thecell-based drug business making the most of ourtechnology, built over years in the development of
medical devices and pharmaceutical products. We
also aim to pave the way for insurance coverageof regenerative medicine to turn this innovative
therapy into a commonly available treatment,
which would benefit many patients sufferingfrom sequelae.

Development of a prototype culture bag for a novel 3-dimensional (3D)
culture system that allows mass culture and large-scale production ofhuman pluripotent stem cells (ES/iPS cells) without causing damage
In April 2014, Kyoto University’s Institute forIntegrated Cell-Material Sciences (iCeMS,
Founding Director Norio Nakatsuji) and Nipro
released a prototype culture bag for the 3D massculture system for human pluripotent stem cells(ES/iPS cells), newly developed by Kyoto University
and Nissan Chemical Industries, Ltd. This culture
bag was developed under the project “Evaluationbasis technology development to promote
practical applications of human stem cells”
supported by the New Energy and Industrial
Technology Development Organization (NEDO).
By combining our culture bag and two types
of functional polymers, the 3D culture system
overcomes shortcomings of conventional dish or
suspension culture systems, such as physical
Human
Huma
Hu
ma
an iP
iPS
PS ce
cells
ellllss
1stt dayday ofof cu
culture)ulttur
ure)
e
e)
(1

damage to cells, and ensures stable mass
production of high quality human pluripotent
stem cells. This achievement is expected to makea significant contribution to the practical use andfuture commercialization of regenerative medicine
and drug discovery using such cells.
Our recently developed 3D culture system is abreakthrough technology that enables mass
production of human pluripotent stem cells,
which is indispensable to the future practical useof regenerative medicine. A research paper
reporting the details of this accomplishment has
recently been published online in Stem Cell
Reports (2014),
http://dx.doi.org/10.1016/j.stemcr.2014.03.012.

Human
Huma
Hu
ma
an iP
iPS
PS ce
cells
elll st day
5th
day ofof culture)cu
ulttur
u e)
e
(5

200µm
2
20
0µ
µm

200µm
2
20
0µ
µm
*Data acquired by Nipro Corporation

Nipro continues to actively promote regenerative medicine and advanced therapies based on the motto“user-focused”. It is our endeavor to develop and provide safer and more environmentally conscious products, aswell as to improve the QOL of patients.

Nipro Corporation Annual Report 2014 14

Global Activities■ Europe(Millions of yen)

50,00040,43440,00030,00032,372
20,707

23,14020,00010,000

2011

2012

2013

2014

Nipro Europe N.V.

■ Sales Ratio by Region (2014)
Asia

4%
5%

Europe13%

America

19%

China

Total
otal Sales

300,75300,753(Millions
illions of yen)Domestic 58%

Demand in the global medical market continues to increase
every year. There has been a rapid increase in demand
particularly in Asian, Central and South American and Africancountries due to the increase in population, economic growthand improvement of medical infrastructure.
Given these market conditions, we have continued to
expand our sales network, enhance production capacity andefficiency of overseas plants, and to expand our productportfolio. These efforts are being carried out under our
mission of providing high quality products at low prices to as
many users as possible, consistent with our philosophy of“user-focused and patient-focused” business development.
These efforts have contributed to a major increase inconsolidated net sales. Nipro’s foreign sales in fiscal 2013reached ¥125.892 billion (US$1,223.2 million), up 23.4%
from the previous fiscal year.
Currently, Nipro group has a total of 131 manufacturing
and sales locations (including those under construction) in 45
15 Nipro Corporation Annual Report 2014

Nipro JMI Co., Ltd.

countries. The Company is positioning its workforce to realize
a “local production for local consumption” model in the
medical device, pharmaceutical and medical glass businessareas.
In fiscal 2013, we opened sales offices in Bolivia andEcuador, which strengthened our sales network in SouthAmerica. Nipro Nordics A.B., Nipro group’s first sales
subsidiary in Northern Europe, started operation in February
2014.
A sales office was opened in New Jersey, USA as a strategic
business base for the North American market. Our objective isto enhance the Nipro brand presence in the United States
which is a global leader in advanced medical care.
The recently opened medical device production plants,
Nipro India Corporation Pvt. Ltd. and Nipro JMI Company Ltd.
(Bangladesh), are operating smoothly. P.T. Nipro Indonesia
Jaya, which has been manufacturing and marketing bloodtubings, has expanded its product line to include syringes,

Nipro Diagnostics,
DiInc.

■ China(Millions of yen)

■ America

13,232

15,00012,000

8,634

9,863

9,000
6,000

45,0003,000

30,0002012

2013■ Asia2014

37,121

40,51946,311

15,0002011(Millions of yen)

18,000

2012

2013

2014

15,33813,51315,000

10,482

12,0009,000

56,88760,000

5,756

2011

(Millions of yen)

75,0007,453
Marketing

6,000

Manufacturing

3,000

2011

2012

2013

2014

Manufacturing and Marketing

Nipro Medical Ltda.

arteriovenous fistula needles and intravenous catheters.
In May 2014, Nipro Medical (Hefei) Co., Ltd. (China) started
production of dialyzers which will be shipped to Asia and the
Middle East. Nipro Pharma Corporation is working diligently to
prepare for operations at its Nipro Pharma Vietnam Co., Ltd.
pharmaceutical production plant in April 2015. Among theglass plants, a new furnace, which produces glass tubes, hasbeen installed to manufacture highly stable pharmaceuticalpackaging containers at Nipro Glass India Pvt. Ltd. A newplant that will produce high quality glass tubes is underconstruction at the Chengdu Pingyuan Nipro Pharmaceutical
Packaging Co., Ltd. (China).
In addition, we engaged in M&A activities to strengthen
our core business in order to provide more comprehensive
services. In August 2013, Nipro Diagnostics, Inc., a company
that manufactures and markets diabetes products in the
United States, acquired P.J. Noyes Company, Inc., a US
manufacturer of healthcare products, and renamed it Nipro

Consumer Healthcare, Inc. Nipro Diagnostics, Inc. is
expanding its activities as a total provider of healthcare
products for people with diabetes. In January 2014, Nipro
Europe N.V., our headquarters for the European region,acquired the German water treatment system manufacturer,
Phoenix Pure Water GmbH (now renamed Nipro Pure Water
GmbH) in order to expand the dialysis product line, the coreproduct line of Nipro Europe N.V. The company plans to
expand the sales of these products within Germany and othermajor European markets, as well as in other regions andcountries, by leveraging the sales network of Nipro group.
There are great opportunities for growth in the fields of
medical devices, pharmaceuticals and medical glass products,
where we have been operating. While the medical market
environment is complex, Nipro intends to contribute to global
healthcare while further expanding our business in different
fields, utilizing our global network and strong workforce.

Nipro Corporation Annual Report 2014 16

Research and Development

Research and Development Laboratory

Nipro group is engaged, in research and development of
medical devices and pharmaceuticals, with Nipro Corporation
playing a central role, at the Nipro Life Science Site located in
Minami Kusatsu, Shiga Prefecture.
In Medical-Related business, in the coming fall we plan toopen a new training facility for medical professionals at thesame site, called “institute for Medical Practice (iMEP)”. We
intend to create a setup for directly gathering the views of
medical professionals as they undertake training in the use of
medical devices, and promptly reflect them in our R&D and also
use them for developing new products and improving existing
ones. We will also set up CR center in the R&D center bymerging the clinical trials division and the pharmaceutical
approval applications division in order to further speed up theprocedures of pharmaceutical approval applications and strive to
become a truly global multidisciplinary medical manufacturer.
We are making earnest efforts to further secure the high qualityof our products as befits a global manufacturer.
In the Pharmaceutical-Related business, we have beendeveloping high quality generic drugs for many types of diseases,
targeting branded drugs of all dosage forms to meet the needfor low drug prices and improved quality of treatment. Efforts
are also on to develop high added value products such as kit
products that incorporate ease of handling in medical practiceand orally disintegrating tablets for patients who find it difficult
to swallow pills.
The total R&D expenditure in this consolidated fiscal year was¥7.9 billion (US$76.7 million).
R&D activities of the different business segments are described
below.

1. Medical-Related Business
R&D has been undertaken in the following fields, with the
Research and Development Laboratory of our company playing apivotal role.

Division of Cell Devices

In the area of regenerative medicine, we are participating inindustry – university – government collaborative research
projects to pursue the development of cell drugs and automatedcell culture systems for induced pluripotent stem (iPS) cells. With

17 Nipro Corporation Annual Report 2014

cell drugs, our objective has been to make autologous bonemarrow cells into practically applicable pharmaceutical products
for use in regenerative treatment of cerebral infarction andspinal cord injury. Early development of such cell drugs is much
awaited, as aftereffects like loss of motor function for which noeffective therapy is currently available often persist after such
ailments. The performance of an automated prototype cell
culture system for iPS cells was evaluated at several researchfacilities last fiscal year and a mass production model will now
be developed on the basis of the evaluation.

Division of Medical Devices

In the field of safe transfusion products, we have released
arteriovenous anti-needle stick indwelling winged infusionneedles of 2 types, i.e., with and without injection port. We also
released a general-purpose SAFETOUCH® needle that combined
an anti-stick needle protector with a hypodermic needle, in theEuropean market. We released SAFETOUCH® PSV mini, a safe
scalp vein set needle created by further miniaturizing the existinganti-stick mechanism-equipped PSV to produce a less bulky
product with better user-friendliness and safety. To countercracking that develops in pharmaceutical products containing fat
emulsions or oily components and solubilizers like surfactants or
ethanol, we released a highly safe 3-way stopcock for regulating
fluid passage, which is made of materials having excellent
chemical resistance and therefore can be used with a wide rangeof pharmaceuticals. We also released an extension tube for the
stopcock. In addition to having good chemical resistance, it issmall and its shape is gentle on the skin. Among dialysis
products, we have launched a gamma ray-sterilized bloodtubing set made with highly safe novel materials that permit
better visual checking of the blood as its transparency does notdeteriorate by the gamma ray radiation.

Division of Diagnosis and Testing ProductsThis term, we launched the genetic test kit Genescholar TM INH TB
that can rapidly detect through a simple procedure drug resistanttuberculosis against which the widely used TB drug isoniazid isineffective. Isoniazid resistance has many genetic mutation sites
and only about 60% of the cases are detected with earlier
genetic tests. However, with the discovery of new genes
associated with this drug resistance, it is now possible to detect
about 90% of the cases. We also released Nephroscholar TM

Capture PR3 ANC, a diagnostic kit for rapidly progressive
glomerular nephritis with improved sensitivity in detecting
relapse. TRUEpico®, the world’s smallest blood glucose meter
meant to be used by diabetic patients, was also launched.

Division of Functional Pharmaceutical Containers

We developed Leuprorelin Acetate Injection Kit for use in thetreatment of gynecological diseases like endometriosis anduterine myoma and also prostate cancer. It was first approved inJapan as a generic pharmaceutical product, and marketing wasstarted in February. The kit consists of a glass barrel with abypass, a metal needle, specially-shaped gaskets, and a pre-filled
double chamber syringe made of plastic components. These
make the product more compact and functionally superior thanthe original product. The pharmaceutical agents used in thisproduct were also developed at the Nipro Pharmaceutical
Research Center. The entire development and production of thestructural components and pharmaceutical agents of theseproducts was done within Nipro group. The pre-filled syringewith barrel made of a cycloolefin polymer (COP) resin wasdeveloped and launched in the market in August. This syringe
barrel is a high value-added container with the advantageous
features of high transparency, low leaching, low adsorption andgood chemical resistance.

Division of Circulatory and Interventional Products

Manufacturing and marketing approval was obtained this termfor our PTCA catheter (trade name CELSUS ®), which has thehighest guaranteed pressure resistance (RBP 24 Atm) for suchcatheters in Japan, and is used for dilation of calcified lesions
and for post-stenting dilation. This is a type of PTCA balloon
catheter used for balloon dilation of stenosis in percutaneous
coronary intervention (PCI) for coronary artery diseases, such asacute myocardial infarction or coronary artery occlusion. We also
got manufacturing and marketing approval for a Nipro
directional coronary atherectomy (DCA) catheter that ablates
and removes atheromas in narrowed or occluded arteries with asmall embedded rotary cutter. For percutaneous peripheral
interventions (PPI) on peripheral blood vessels, this term wereleased the thrombus aspiration catheter E-VAC ®. This productaspirates thrombi from thrombotic occlusive lesions in peripheral
blood vessels that may have dialysis shunts and restores blood
flow. We also launched FINESTREAM ® GR, a PTA balloon
catheter used for balloon dilation of stenosis in peripheralarteries. Its inner shaft is a tungsten braided tube that has
greater flexibility and pushability than conventional products.

Division of Artificial Organs

Our membrane-type artificial lung with venous reservoir, meant
for use during heart surgery, received the “CE Mark” this term
and its marketing in European and other target countries has
started. This product includes a high efficiency artificial lung thatremoves carbon dioxide from blood and oxygenates the blood inplace of the lungs, and a venous reservoir with excellent
operational performance which allows filtration and recovery of
lost blood, removal of air bubbles from the blood andmaintenance of bodily blood volume. For the Japanese market,
we have applied for pharmaceutical approval of a biocompatible
coating product, under the new materials category. Certification
was granted for the venous reservoir made of the same material
for which a pre-certification application had been filed, and the
product will be marketed shortly. Certification has also beenobtained for an arterial filter for removing thrombi and bubbles
that develop in the extracorporeal circulation during heart
surgery, and preparations are underway for its market launch.
The basic concept of our R&D center is to develop and provide
high-value added products by approaching medical needs andproblems from unique viewpoints. Our primary aim is to carryout exhaustive research on medical devices, and to act as adriving force to produce high-quality Nipro products.
The total research and development cost of this businesssegment in the fiscal year was ¥4.1 billion (US$40.2 million).

2. Pharmaceutical-Related Business
The following research and development activities have been
carried out, with the Nipro Pharmaceutical Research Centerplaying a pivotal role.

Injectable Drugs: Injection Kits, etc.

We have been actively pursuing the development of
formulations for injection kits that have superior ease in handlingin medical practice. This term, we have released to the market adouble-chamber prefilled syringe (1 month depot dosage form)of leuprorelin acetate (branded version: Takeda Pharmaceutical’s
LEUPLIN ®) used in hormone therapy for prostate cancer andendometritis. In a continuation of this product line, we areengaged in the development of a 3-month depot formulation ofleuprorelin acetate and highly difficult-to-develop extended
release injectables. Development of premixed bag drugs, inwhich the already diluted drug solution is packed in a bag, andliquid-powder double bag drugs is also underway.

Oral Drugs: Orally-disintegrating Tablets, etc.

Apart from the development of ordinary oral drugs, we develop
high value-added pharmaceutical products that use ingenious
drug formulation techniques. One example is the developmentof orally-disintegrating (OD) tablets that can be ingested withoutwater. In the Fexofenadine (branded version: Sanofi’s
ALLEGRA TM ) OD tablets used to treat allergic diseases launchedthis term, the bitter taste of the main active ingredient isreduced through a microparticle coating technology developedby our company. We could successfully produce OD tablets ofambroxol hydrochloride also which was available in a slow
release capsule form, and we are planning to release it in themarket next term.

External Use Products

Tape, hydrogel-patch and gel containing the anti-inflammatory
analgesic loxoprofen sodium (branded version: Daiichi Sankyo’s
LOXONIN TM ) were launched this term.
We applied to US FDA for manufacturing approval ofhydrogel-patches of lidocaine hydrochloride, a generic product.
Research for the development of tapes and hydrogel-patches
that are thin and light-weight, and have good tackiness andstretchability, is planned to be continued in the future, keeping
in mind the release of the products in overseas markets as well.

Generic Anti-cancer Drugs and Biosimilars

Anti-cancer drugs and biologics the demand for which is
expanding rapidly at present are generally expensive. The
introduction of generics, which will be cheaper, is much awaited.
Taking this into account, we commercialized a total of 4
generics, 1 oral and 3 injectable anti-cancer drugs this term. For
biosimilars, which are the generics of biologics, we have been
striving for speedy productization through tie-ups with firms
manufacturing drug substances and drug products with favorable
prices and excellent quality and are at the pre-nonclinical study
stage with one antibody drug. In the future also, we intend toactively pursue development work to provide high quality, lowcost and safe generics to reduce the spiraling cost of medicines.
The research and development cost of this business segmentin the fiscal year was ¥3.8 billion (US$ 36.4 million).

Nipro Corporation Annual Report 2014 18

Status of Corporate Governance

1. System for Corporate Governance(1) System for Corporate Governance and Reasonsfor Adoption

Nipro Corporation has an established corporate governance system
including organizations for the Meeting of Shareholders anddirectors as required under the Companies Act, in addition to a
Board of Directors, auditors, Board of Auditors and an Accounting
Auditor. Nipro Corporation has also established internal committees
such as the Operational Risk Management Committee. This
committee continuously maintains close coordination with external
parties such as the company attorney, to enable effective
monitoring and supervision of the efficiency and propriety ofoperations across the company as a whole.
Since its establishment, Nipro Corporation has diversified its
business and has established an independent management systemfor each division. Nipro group operations are integrated throughmutual collaboration and company-wide governance by Nipro
Corporation. The foundations for this system are the management
systems of each business unit. Our corporate governance system
functions effectively as a traditional and coordinated management
system for the Nipro group, by clarifying responsibilities andenhancing management systems.

(2) Internal Control Systems

Nipro Corporation’s basic policy for internal control systems, as
stipulated in Article 362, Paragraph 5 of the Companies Act, wasapproved at the Board of Directors meeting convened on April 29
and implemented from May 1, 2006.
Nipro Corporation strives to make business units the foundationsof its internal control system for the Nipro group overall. Nipro
Corporation’s directors and auditors, as well as representatives ofeach of the major companies of the group, hold a groupmanagement meeting on a monthly basis. These meetings are used
to report on the progress of business activities, decide key operating
matters, and deliberate on pending matters. To build awareness ofand compliance with laws, regulations and corporate ethics among
executives and employees, Nipro Corporation is engaged in efforts
to raise awareness and promote compliance. Examples of this arepreparing a compliance handbook and legal compliance manuals
and making them available on the corporate portal site,
implementing an internal reporting system to collect and respondto risk data, and distributing appropriate information via net
bulletin boards and the intranet. These internal control systems aretargeted at the executives and employees of each company in the
Nipro group, and are operated under an integrated management
mechanism which seeks to ensure close mutual collaboration.

(3) Risk Management System

Nipro Corporation has established risk management regulations anda system for managing business and other specific risks. Its purpose
is to recognize and capture risks that could have a material impact
on business operations, in an appropriate and comprehensive
manner. Nipro Corporation has also established an Operational Risk
Management Committee to ensure cross-sectional management
across all group companies. The committee endeavors to further
strengthen risk management systems to prevent, avoid and learn
from risks and crises. Nipro Corporation has also established aSanction Committee, chaired by the President, which endeavors toensure sound business management through the appropriate
handling of sanctions. Nipro Corporation produced the Disaster
Prevention and Crisis Management handbook and distributed it toeach employee within the Nipro group. Nipro Corporation tries hardto keep employees fully informed about taking calm andappropriate action when faced with disasters and about reassessing
and renewing business continuity plans as appropriate.

19 Nipro Corporation Annual Report 2014(4) Basic Structure of Corporate Governance andRisk Management
Meeting of Shareholders
Election
Accounting
AuditorAccounting
Audit(Auditors)
Board ofAuditors

Operational
Audit(Directors)
Board ofDirectors

Committees[Decision-making]Supervisionof Directors’
executionof duties

President
Third
Party
i.e.
lawyer,accountant( )Directorwithresponsibility
for operation

Operational
Risk
Management
Committee

Division General Manager,
Manager, Assistant Manager

Conceptual Diagram of Corporate Governance

2. Internal and Statutory Auditing(1) Internal Auditing

Nipro Corporation has established an Internal Audit Division,consisting of an Audit Office and an Overseas Audit Office, andconducts audits of accounting and other operations based oninternal audit protocols. In addition to the two full-time employees
in the Internal Audit Division, employees are dispatched asnecessary from the Head Office Management Division or otherdivisions. Auditors carry out inspections and ensure smooth andefficient performance. Audits are carried out efficiently inaccordance with audit policies and schedules as determined eachfiscal year. Nipro Corporation endeavors to ensure smoothaccounting and statutory audits through mutual collaboration
between our auditors and accounting auditors.

(2) Statutory Auditing
For each statutory audit, auditors attend key meetings such as
those of the Board of Directors, in accordance with the auditing
policy and roles determined by the Board of Auditors. Auditors
receive performance reports from directors and employees, and areable to request further explanation when necessary, and inspect key
documents. Auditors also undertake other auditing duties such as
investigating the state of operations and assets in key places ofbusiness. Board of Auditors Meetings are held regularly, or asnecessary, in order to exchange views and hold discussions.

3. External Directors and External Auditors(1) External Directors and External Auditors
One of the directors is an external director, two of the threeauditors are external auditors and one of them is designated as anindependent auditor.

(2) Personal, Capital, Business or Other Interests
between Nipro Corporation, External Directors
and External Auditors
There are no particular interests or relations between Nipro
Corporation, the external director and the two external auditors.

(3) Function and Role of External Directors andExternal Auditors in the Corporate Governanceof Nipro Corporation
Nipro Corporation has newly appointed one external director at the
Meeting of Shareholders held on June 26, 2014 to strengthen
corporate governance. The external director has excellent insight
and wide-ranging experience developed through her current andformer position and provides a management function with theappropriate advice and guidance in order to reinforce supervision.
The External auditors are expected to apply their profoundknowledge from past experience of business management to theexamination of the management of Nipro Corporation from a broad
perspective. They work in close collaboration with the internal
auditors, employees of the Audit Office, auditors and accounting
auditors of subsidiaries. Their role is to effectively demonstrate an
objective auditing function, and to effectively ensure integrated andeffective audit activities across the Nipro group as a whole.

(4) Policy and Criteria for Independence from theFiling Company in Election of External Directors
and External Auditors
Nipro Corporation has no criteria or policy in place regarding
independence from the filing company with respect to the electionof external directors and external auditors. However, the evaluation
criteria used for the independence of stock exchanges are referenced
in such elections.

(5) Approach to the Election of External Directors
and External Auditors

Close coordination with the external director and the full-time
auditors, employees of the Audit Office and assigned staff from the
management section of the head office (as needed) ensuressufficient cover to implement the supervision and the audit function
and role as required by the current corporate governance system.
In the event that the number of auditors falls below the legal
minimum, a pre-nominated standing auditor who meets therequirements to qualify as an external auditor would be called upon.
Should the need arise to improve the audit function inaccordance with business developments and future expansion, areview of the audit system would be considered, including an
increase in the number of auditors.

(6) Mutual Collaboration between External Audits andInternal, Statutory and Accounting Audits, and theRelationship between Internal Control Divisions

The external director attends meetings of the Board of Directors andsupervises our management based on her extensive knowledge andmanagement experience from an independent standpoint. External
auditors carry out auditing activities including attending key
meetings such as meetings of the Board of Directors in accordancewith the audit policy and roles determined by the Board of Auditors.
They are able to access reports via the full-time auditors or directlyfrom directors and employees, and inspect key documents. External
auditors also attend periodic or occasional meetings of the Board ofAuditors to contribute to discussion and exchange opinions from an
objective and independent viewpoint.
External auditors strive to facilitate a smooth audit service
through close collaboration with employees of the Audit Office, thefull-time auditors, auditors of subsidiaries and the accounting
auditor.

4. Remuneration of Directors and Auditors(1) Total Amount of Remuneration for Each Class ofFiling Company Officer, Total Amount of
Remuneration by Type, and Number of Directors
and Auditors Eligible for Remuneration
Millions of yen
Total
Total amount of remuneration by typeamount of
remuneration
AnnualRetirement
Bonusby typeremuneration
benefits

Directors¥
Auditors excluding
external auditors
External auditors

576
6

¥

117
6

2

2

¥

415
—

¥

—

44
—

27
1

—

3

Thousands of U.S. dollars
Total
Total amount of remuneration by typeamount of
remuneration
AnnualRetirement
Bonusby typeremuneration
benefits

Directors$ 5,597
Auditors excluding
58
external auditors
External auditors
19$ 1,13758$ 4,032
—

19

—

$

Number of
eligible
corporate
officers

Number of
eligible
corporate
officers

428
—

27
1

—

3

(2) Total Amount of Remuneration etc. for Each
Filing Company Officer
As there was no director or auditor whose total consolidated
remuneration exceeded 100 million yen, this information is notdisclosed.

(3) Policy for Determination of Officer Remuneration• Director’s Remuneration, etc.
Director’s remuneration is determined by the Board of Directors
or based on fixed standards set out by the Board of Directors.
Annual remuneration is determined considering the market
rate and the salary level of employees. Bonuses are calculated bya fixed method based on a sliding scale system in accordancewith the performance of the business. Retirement benefits are
granted by a resolution of the Board of Directors, up to a ceiling
approved by the Meeting of Shareholders.
• Auditor Remuneration, etc.
The annual remuneration is determined by mutual accord withthe auditors.
Ceilings on the amounts of remuneration for directors andauditors are determined by a resolution taken at the Meeting of
Shareholders. Annual directors’ remuneration may be up to 800
million yen, based on a resolution of the 57th Meeting of
Shareholders held on June 25, 2010.
Annual auditors’ remuneration may be up to 30 million yen,based on a resolution of the 54th Meeting of Shareholders heldon June 27, 2007.

5. Accounting Audits
Name of Accounting Auditor: Osaka Audit Corporation
Names of Certified Public Accountants conducting the Audit:
Yoshitsugu Hashimoto,
Kouichi Aki,
Takashi Kinoshita
Support Staff for Audits:
Certified Public Accountants: 10 people
Other staff: 5 people

Nipro Corporation Annual Report 2014 20

Financial Review■ Overview

During the current period under review, the global economy
exhibited a basic tone of moderate recovery overall. Signs of an
upturn finally began to appear in Europe, and both stock prices andpersonal consumption held firm in the United States. In Japan, theeffects of policies for monetary easing and economic stimulus
brought a correction of the yen’s appreciation and steady progresson the path to recovery. Nevertheless, the economic outlook
remained clouded by some uncertainty because of apprehensions
over the effects of the consumption tax hike and rise in prices forimported materials.
Under such circumstances, the Nipro group continued its all-out
efforts to expand sales, reduce production costs, and thereby
improve its operating results.

■ Consolidated Business Results
Net Sales

In the year ended March 31, 2014, consolidated sales for the current
period under review increased by 24.8% from the previous year to¥300.8 billion (US$2,922.2 million).
Medical-Related BusinessIn this segment, through the integration of our pharmaceuticalproduct sales units in April 2013, we pursued synergistic effects as
an all-around medical enterprise spanning the fields of medical
equipment (Medical Sales Division) and drugs (Pharmaceutical Sales
Division). We also became able to promptly provide a wide range ofgoods and services from the customer’s perspective. Under thesecircumstances, the Medical Sales Division saw favorable sales ofHeart Mate II (the implantable ventricular assisting device launchedin April). Similarly, the existing cardiovascular (CVS) products such as
extracorporeal ventricular assist devices posted substantial increases
in both sales and profit.
In the field of vascular products, SeQuent® Please, thedrug-eluting balloon catheter whose sales were launched in January
2014, traced favorable trends for both sales and profit thanks tocollaboration with Goodman Co., Ltd. Sales of dialysis products(e.g., dialysis machines and HDF filters) and dialysis pharmaceuticals
also increased greatly along with the spread of on-line HDF
treatment. Sales also held firm for injection-transfusion products,
enteral-alimentation products, and testing products. In the
Pharmaceutical Sales Division, there was some hold-off from purchase
before the April 2014 revision of pharmaceutical reimbursement
prices, but there was more prevalent switching to generic drugs at
DPC hospitals and dispensing pharmacies with an eye on the revisionof diagnosis and treatment reimbursement accompanying official
policy to promote use of generic drugs. This division as wellconsequently recorded favorable sales along with an increase in
first-time adoption, chiefly of drugs for oral and external use.
Turning to overseas sales, profits greatly expanded because of thedramatic improvement in export payability under the influence of the
yen’s depreciation against the US dollar and Euro in the foreignexchange market. In addition, our setup for sales through local sales■ Net Sales (Millions of yen)
350,000

300,753

280,000
210,000 177,830

195,943

Pharmaceutical-Related BusinessIn our Pharmaceutical-Related business, we engaged in finely-tuned
development of contracted business, through provision of various
services in contracted development and support for addition of value
in addition to the conventional contracted manufacturing. The
period under review saw the launch of shipments of biosimilar
preparations and anti-cancer agents, and strong sales of major
generic drugs. We also promoted consigned sales based on joint
development with the generic drug divisions and new drug
development divisions of leading pharmaceutical companies insideand outside Japan.
Sales of pharmaceutical containers and devices related topharmaceutical preparation and administration were strong becauseof our efforts to provide containers and systems suitable for each
pharmaceutical product, address various needs on the medical caresite for items such as small-volume bags for antimicrobial agents or
osteoporosis drugs and materials for pre-filled syringes as well as
rubber stoppers for pharmaceutical and vaccine use and containers
for kit products. These containers and systems were developed by
the Group or through joint development with pharmaceuticalmanufacturers based on our original processing technologies forplastics, rubbers, and metals. Furthermore, under governmental
policy to curb medical expenses, we continued to work together
with domestic and foreign pharmaceutical manufacturers for total
lifecycle management of pharmaceutical products extending tofuture development of combination products, self-injection systems,
and dosage form modification.
As a result, net sales in this business amounted to ¥51.5 billion(US$500.5 million).
Glass-Related Business
Sales of tube glass for ampoules were on a par with those of thesame period of the previous year. Although the domestic demand
continued to decline, there was a slight upturn in orders fromdomestic glass-processing companies. Sales of tube glass for vials
also were up, thanks to an expansion of domestic sales driven byincreased orders in connection with flu vaccines and antimicrobial
preparations.
Sales of glass containers for medical recorded an overall increase
from the same period of the previous year, because the decrease indomestic sales of existing products was more than offset by theincrease in sales of imported vials for special preparations.
Among other glass-related products, sales of thermos bottles fell
from the same period of the previous year due to a decline in export
and sluggish domestic demand. Regarding glass for lighting purpose,demand for automotive electric lamp products continued in the trendof growth supported by the increased auto industry production, andthis drove the increase in sales of all electric lamp glass products.

■ Operating Income (Millions of yen)

■ Income Before Income Taxes

25,00025,00020,000241,021subsidiaries resting on local production for local consumption tookroot, allowing sales activities with close ties to the markets. As areflection, firm sales were recorded for dialysis products such as
dialyzers (artificial kidneys) as well as diabetes products.
As a result, net sales in this business came to ¥244.2 billion(US$2,372.7 million).

18,094

17,225

212,013

11,371

12,29015,000140,000

10,00010,00070,000

5,000

5,000

2010

2011

2012

21 Nipro Corporation Annual Report 2014

2013

2014

2010

2011

2012

18,06020,00015,82515,000and Minority Interests (Millions of yen)

2013

2014

13,872

12,891

11,022
7,432

2010

2011

2012

2013

2014

Similarly, sales of tube glass for electric lamps increased along withthe growth in demand for tube glass for lamps, and this translated
into a sales increase for glass for lighting purpose as a whole.
As a result, net sales in this business totaled ¥4.8 billion (US$46.4
million).
Other Business
Sales from real estate rental income were ¥0.3 billion (US$2.6
million).

Cost of Sales

The cost of sales increased 21.6% compared with the previous fiscal
year to ¥213.2 billion (US$2,071.7 million). The increase
corresponded with the increase in net sales, however, the ratio of
cost of sales to net sales decreased 1.8 percentage points comparedwith the previous fiscal year to 70.9%, mainly due to thecommencement of operations in new plants.
As a result, gross profit increased 33.2% compared with theprevious fiscal year to ¥87.5 billion (US$850.5 million).

Sales, General and Administrative Expenses

Sales, general and administrative expenses increased 38.5%
compared with the previous fiscal year to ¥75.2 billion (US$731.1
million), mainly as a result of the addition of Goodman Co., Ltd. and3 other companies into the scope of consolidation and an increasein depreciation and amortization of goodwill.

Operating Income

As a result of the aforementioned factors, operating income
increased 8.1% compared with the previous fiscal year to ¥12.3
billion (US$119.4 million). The ratio of operating income to net sales
decreased 0.6 percentage points to 4.1%, owing to an increase insales, general and administrative expenses.

Operating Income by Business Segment
Medical-Related Business
Operating income of the Medical-Related business increased 23.9%
compared with the previous fiscal year to ¥17.7 billion (US$171.9
million), due to the effect of the exchange rate and the addition ofGoodman Co., Ltd. and other 3 companies.
Pharmaceutical-Related Business
Operating income of the Pharmaceutical-Related business increased
100.9% compared with the previous fiscal year to ¥8.0 billion(US$77.9 million), due to strong sales in contracted business.
Glass-Related Business
Operating income of the Glass-Related business decreased 7.3%
compared with the previous fiscal year to ¥0.6 billion (US$5.4
million), due to expenses for improving manufacturing facilities.

83.7% compared with the previous fiscal year to ¥14.2 billion(US$137.9 million) mainly due to an occurrence of allowance for
doubtful debts.

Other Income (Expenses)

We recorded other income of ¥0.6 billion (US$5.8 million) comparedwith other income of ¥6.7 billion in the previous fiscal year. In the
period under review, we recorded ¥1.3 billion (US$13.1 million) in
foreign exchange gains, a decrease of 56.1% compared with theprevious fiscal year, and a decrease on sales of investment securitiesof ¥2.8 billion (US$27.7 million).

Income before Income Taxes and Minority Interests

As a result of the factors outlined above, income before income
taxes and minority interests decreased 28.6% compared with theprevious fiscal year to ¥12.9 billion (US$125.3 million).

Income Taxes

Income taxes, including deferred taxes, increased 31.6% comparedwith the previous fiscal year to ¥9.8 billion (US$95.1 million) due tothe increase in income before income taxes and minority interests.
The effective tax rate was 75.9%, higher than the rate of 41.2% for
the previous fiscal year, mainly because of an increase in theamortization of goodwill and valuation allowance.

Minority Interests in Income from Consolidated Subsidiaries
Minority interests in net income from consolidated subsidiaries
amounted to ¥0.2 billion (US$2.3 million).

Net Income

Net income decreased 72.0% compared with the previous fiscal yearto ¥2.9 billion (US$27.8 million). Net income per share decreased to¥18.2 (US$0.18) from ¥60.0 for the previous fiscal year. Return on
equity decreased 6.6 percentage points to 2.3% from 8.9% for theprevious fiscal year because of the higher net income.

Net Sales by Geographic Segment
Japan
In Japan, net sales increased 25.8% compared with the previous
fiscal year to ¥174.9 billion (US$1,699.0 million) due to the additionof Goodman Co., Ltd. and Nichihos Co., Ltd. into the scope of
consolidation.
America
In America, net sales increased 22.8% compared with the previous
fiscal year to ¥56.9 billion (US$552.7 million). The major reason of
the increase was the expansion of the distribution network andstrong sales of diabetes products.
EuropeIn Europe, net sales increased 24.9% compared with the previous
fiscal year to ¥40.4 billion (US$392.9 million) due to strong sales of
dialysis products and glass products for medical purposes.

Other Business
Operating income of other business amounted to ¥0.2 billion(US$2.1 million), mainly from real estate rental income.

Asia
In Asia, net sales increased 22.2% compared with the previous fiscal
year to ¥28.6 billion (US$277.6 million) due to a steady expansion ofsales of dialysis products in the Asian market, especially in China.

Adjustment
Unallocated corporate costs, consisting mainly of R&D-related
expenses and headquarters administration expenses, increased■ Net Income (Millions of yen)

■ Capital Expenditures (Millions of yen)

■ Total Assets (Millions of yen)

12,00050,000750,000

10,232

39,525

10,0008,000

37,99740,00035,093579,302600,000

7,253
30,0006,000

619,655

476,510 499,687

450,000 383,397

23,323

4,586

4,000

2,861

2,456

20,00015,209300,000

10,000

2,000

2010

2011

2012

2013

2014

150,000

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

Nipro Corporation Annual Report 2014 22

■ Financial Position■ Basic Policy on Distribution of Profit

Total assets as of March 31, 2014 stood at ¥619.7 billion(US$6,020.7 million), an increase of 7.0% from the end of previous
fiscal year.
Current assets increased 2.8% from the end of previous fiscal yearto ¥296.1 billion (US$2,877.2 million), due mainly to an increase intrade notes and accounts receivable.
Property, plant and equipment, net of accumulated depreciation,
stood at ¥191.6 billion (US$1,861.6 million), an increase of 9.7%
compared with previous fiscal year.
Capital investments in property, plant and equipment totaled¥31.1 billion (US$302.1 million). By business segment, capital
investments amounted to ¥16.8 billion (US$163.2 million) in the
Medical-Related business and ¥10.5 billion (US$102.0 million) in the
Pharmaceutical-Related business.
Intangible assets increased 23.2% to ¥42.2 billion (US$410.2
million) due to an increase in goodwill.
Investment and other assets increased 8.9% to ¥89.7 billion(US$871.8 million), due mainly to the increase in investment inunconsolidated subsidiaries and an affiliate accounted for by theequity method.
Current liabilities increased 17.3% from the end of previous fiscal
year to ¥250.7 billion (US$2,436.0 million), mainly due to anincrease in current portion of convertible bond-type bonds with
subscription rights to shares.
Long-term liabilities decreased 1.6% from the end of previous
fiscal year to ¥233.0 billion (US$2,263.7 million), owing to a decreasein convertible bond-type bonds with subscription rights to shares.
Total net assets increased 5.6% from the end of previous fiscal
year to ¥136.0 billion (US$1,321.0 million). Shareholders’ equity
decreased ¥19.3 billion and accumulated other comprehensive
income increased ¥24.8 billion from the end of previous fiscal year.

Nipro has been paying dividend to shareholders by positioning thereturn of profits as an important management policy. Retained
earnings will be actively invested in the research and development
division, in addition to the sales division and production division, asa part of expansion of the business base and long-term businessdevelopment in order to ensure stable profit and achieve continued
growth.

■ Risk Factors

The following are risks that may have an effect on Nipro group’s
operational results and/or financial condition.
The items concerned were determined as of March 31, 2014.

(1) Risks Related to Product Safety

Nipro group brings all of its capabilities to bear in ensuring productsafety in the design, development and manufacturing of medical
devices and pharmaceutical products. There are still the risks,
however, those accidental defects or adverse effects could result indamages to a third party and our being sued for liability.
To cover these risks, we therefore maintain general liability andproduct liability insurance. In the unlikely event of a successful claim
in excess of the insurance coverage, however, there could be amaterial adverse effect on our operational results and/or financial
condition.

(2) Risks Related to Supplier Concentration

Nipro group procures materials and parts for its operations from alarge number of suppliers. Some key materials or parts may beobtained only from a single supplier or a limited group of suppliers.
If circumstances at any of these suppliers make it impossible for us
to acquire a sufficient quantity of materials or parts to meet our
production needs in a timely and cost-effective manner, there could
be a material adverse effect on our operational results and financial
condition.

■ Cash Flow

(3) Risks Related to Changes in Government Healthcare Policies

Net cash provided by operating activities amounted to ¥21.6 billion(US$209.4 million), mainly because of net income and depreciation
and amortization.
Net cash used in investing activities amounted to ¥31.9 billion(US$310.3 million), mainly due to purchase of property, plants andequipment.
Net cash used in financing activities amounted to ¥16.3 billion(US$158.8 million) as a result of repayment of long-term loans
payable.
As a result, net cash and cash equivalents decreased ¥21.7 billion
compared with the end of the previous fiscal year to ¥70.9 billion(US$688.8 million).

The business sector to which Nipro group belongs is intimately
connected with the healthcare system and is subject to theregulations laid out by government organizations, including the
National Health Insurance System and the Pharmaceutical Affairs
Law. Should circumstances arise in which we were unable torespond to changes in the environment brought about by
unforeseeable wholesale changes in government healthcare policies,
there could be a material adverse effect on our operational results
and financial condition.

(4) Risks Related to Changes in Sale Prices

The products sold by Nipro group include some that are affected on
an irregular two year basis by price reductions under the Japanese
payment system for medical care, drug prices and reimbursement
prices for medical materials and supplies. Moreover, shouldmeasures to hold down medical costs also become pervasive
worldwide, resulting in intensified competition between
corporations and leading to prices falling to a greater degree than

■ Staff

Total number of employees at the end of the period under review
increased 2,499 compared with the end of the previous fiscal year to
21,826. Employees in Japan increased 384 to 6,208, and overseas
employees increased 2,115 to 15,618.

■ Net Assets (Millions of yen)
150,000

128,763
116,071

120,000

135,961

109,038 113,951■ Basic Earnings Per Share (yen)■ Number of Employees

150

25,000120

21,826
19,327114.4

20,00014,56690,00090

60,00060

30,00030

15,000

60.0

2010

2011

2012

23 Nipro Corporation Annual Report 2014

2013

2014

9,939
10,000

35.3
18.2

19.4
2010

2011

2012

12,017

2013

2014

5,000

2010

2011

2012

2013

2014

confidentiality of personal information in our possession. However, if
due to unforeseen events or an accident this personal information isleaked outside the group, causing a loss of trust or customers, there
could be a material adverse effect on our operational results andfinancial condition.

anticipated, there could be a material adverse effect on ouroperational results and financial condition.

(5) Risks Related to Changes in Prices of Raw Materials

The products manufactured by Nipro group include some that are
made from petrochemical products such as plastics. Should the costof raw materials such as petrochemicals rise, there could be amaterial adverse effect on our operational results and financial
condition.

(12) Risks Related to Litigation

On December 7, 2007, a damage suit was filed at the Tokyo Higher
Court by Naigai Co., Ltd. and Naigai Glass Kogyo Co., Ltd.
(collectively the “Plaintiff”) against the Company, based on Article 25of the Antitrust Law. The claimed amount was ¥2,032 million(US$19,743 thousand, based on a rate of ¥102.92=US$1). On
December 21, 2012, the Tokyo High Court made a judgment that
the Company pay to the Plaintiff a sum of ¥133 million (US$1,292
thousand) together with an amount thereon at the rate of 5% perannum until full payment of such sum shall has been made. The
Plaintiff was not satisfied with the judgment and a petition for
acceptance of final appeal has been filed on January 7, 2013. The
purpose is to reverse the part of the original judgment (high court
ruling) denying the Plaintiff's appeal and to claim that the Company
pay to the Plaintiff a sum of ¥1,352 million (US$13,136 thousand)together with an equivalent amount thereon at the rate of 5% perannum besides the accepted amount in the original judgment.
Should the defense of the Company be unsuccessful and a judgment
to order the payment of compensation be given to the Company,
there could be a material adverse effect on our operational results
and financial condition.

(6) Risks Related to Overseas Expansion

Nipro group maintains manufacturing bases and sales offices aroundthe world for the production and supply of its products. Should there
be unexpected revisions to legal regulations or political or economicchanges in these countries or regions, there could be a material
adverse effect on our operational results and financial condition.

(7) Risks Related to Intellectual Property

Nipro group owns numerous patents and trademarks, and maintains
various proprietary rights for the products it manufactures.
Additionally, we take all possible measures to avoid infringing thepatents and proprietary rights of any third party, and to avoid
breaching any license agreements we have concluded concerningtechnologies. Nevertheless, if an unanticipated claim for damages
were to be made by a third party and the defense of Nipro groupwere to be rejected, there could be a material adverse effect on its
operational results and financial condition.

(8) Risks Related to Environmental Regulations

Nipro group believes it has taken adequate precautions to comply
with applicable regulations in the course of its business activities.
Should our activities cause an unforeseen environmental problem,
however, with a claim for damages made against us, there could bea material adverse effect on our operational results and financial
condition.

(13) Risks Related to Fund Raising

Nipro group relies on debt finance in the form of loans from financial
institutions or issuance of corporate bonds and commercial papers,
etc. to raise business and investment funds. Due to turmoil infinancial markets, reduction of lending from financial institutions to
us or a significant downgrade of our credit rating by credit rating
agency, we may not be able to raise the necessary funds when weneed them on acceptable terms, our fund raising may be restricted or
the cost of fund raising could increase, and there could be a material
adverse effect on our operational results and financial condition.

(9) Risks Related to Exchange Rate Fluctuations

Nipro group, including its overseas subsidiaries, carries out its foreign
currency transactions primarily in US Dollars and Euros, but calculates
financial statements for its overseas subsidiaries using Japanese Yen
for the purpose of producing consolidated financial statements.
Fluctuations in exchange rates may therefore have a material adverse
effect on our operational results and financial condition.

(14) Risks Related to M&A and Business Alliances

Nipro group conducts M&A activities and enters into businessalliances to reinforce its business base. Prior to concluding these
deals, we carry out a thorough investigation of the target company.
However, should any problems arise such as the discovery of
unrecognized liabilities or should the development of the acquired
business not proceed as planned, there could be a material adverse
effect on our operational results and financial condition.

(10) Risks Related to Investment Value

Nipro group’s assets include investments in stocks and othersecurities. These investments have been made for purposes such asbuilding good business relationships with the issuers of suchsecurities, or for gathering useful information for the developmentof new products or new business opportunities. Should the value ofthese investments decline significantly owing to fluctuations in thestock market, circumstances at an issuer, or a change in theaccounting methods used to deal with these investments, there
could be a material adverse effect on our operational results andfinancial condition.

(15) Other Risks

Fires, earthquakes, acts of terrorism, wars, epidemics, or other
unforeseen man-made or natural disasters affecting areas or facilities
where Nipro group conducts its business activities may cause a delay
or interruption in production, sales, distribution, or provision ofservices. Should such a delay or interruption be extended, there
could be a material adverse affect on our operational results andfinancial condition.

(11) Risks Related to Controls on Personal Information
Nipro group has established strict precautions to protect the■ Equity Ratio (%)■ Return on Assets (%)■ Return on Equity (%)

40.0

6.0

10.0

29.8
30.0

5.1

5.0

22.4

22.0

20.7

20.2

8.0

4.0

4.0

3.2

3.0

20.0

2.1

2.0

2012

2013

2014

4.2

4.0

2.3

2.2

2.0

1.0

2011

6.9

6.0

2.1

10.0

2010

8.9

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

Nipro Corporation Annual Report 2014 24

10 Year Summary

Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31
Millions of yen

2014
Income Statement Data:
Net sales ················································································
Medical-Related (*1) ··························································
Pharmaceutical-Related(*1) ················································
Glass-Related (*1) ······························································
Other (*1) ··········································································Store (*1) ···········································································
Cost of sales ···········································································
Selling, general and administrative expenses ···························
Operating income ··································································
Medical-Related (*2) ··························································
Pharmaceutical-Related(*2) ················································
Glass-Related(*2) ·······························································
Other (*2) ··········································································Store(*2) ············································································
Income before income taxes and minority interests ·················Net income ············································································
Capital expenditures ·······························································
Depreciation and amortization ···············································
R&D expenses ········································································
Balance Sheet Data:
Total assets ············································································
Property, plant and equipment-net ·········································
Working capital ······································································
Current liabilities ····································································
Long-term liabilities ································································
Common stock ·······································································
Capital surplus ·······································································Net Assets ··············································································

2013

2012

2011

¥

300,753244,197
51,5084,777
271—
213,22175,242
12,29017,696
8,013
557
216
—
12,891
2,861
35,09325,151
7,891¥

241,021
169,971
66,212
4,603
235—
175,31454,336
11,371
14,287
3,988
601
222
—
18,060
10,23237,997
21,2106,464¥

212,013145,082
59,715
6,954
262—
149,253
46,935
15,825
17,078
4,940
454
230
—
11,022
4,586
39,525
21,581
5,957¥

195,943
132,817
38,00524,704417—
137,768
40,95017,225
18,437
1,658
2,701
88
—
7,432
2,456
23,323
21,244
4,977¥

619,655
191,594
45,405
250,715232,979
84,398689
135,961¥

579,302174,70374,216
213,758
236,781
84,398
636
128,763¥499,687
145,679
61,346
189,090
196,646
84,398636
113,951¥476,510
128,506
40,621
176,401
191,071
28,66329,973109,038

¥

35.3
31.0
23.5
643.9

¥

19.4
17.4
50.0
839.7

Yen

Per Share Data:
Basic earnings (*3) ·································································
Diluted earnings (*3) ······························································Cash dividends ·······································································
Equity (*3) ·············································································

¥

18.2
16.3
30.5
832.1

¥

60.0
54.1
27.5
703.5

Number of common shares issued ··············································
Number of employees ································································

171,459,479
21,826

171,459,479
19,327

171,459,479
14,56663,878,505
12,017

Selected Data and Ratios:
Equity ratio (*4) (%) ·······························································
Return on assets (*4) (%) ························································
Return on equity (*4) (%) ·······················································
Price earnings ratio(*4) (times) ···············································

20.2
2.1
2.3
51.0

20.7
2.1
8.9
14.0

22.0
3.2
4.2
17.5

22.4
4.0
2.2
42.5

(*1) Effective the fiscal year ended March 31, 2011, the Company has adopted ASBJ Statement No.17 “Accounting Standard for Disclosures about Segment of an Enterprise andRelated Information” (March 27, 2009) and ASBJ Guidance No.20 “Guidance on Accounting Standard for Disclosures about Segment of an Enterprise and RelatedInformation” (March 21, 2008). Net sales and operating income for the period for the fiscal year ended March 31, 2010 have been restated to show what the Group’s result
would have been if the new accounting standards had been applied in that year. Before the fiscal year ended March 31, 2009, net sales and operating income have beenstated in compliance with previous accounting rules. In addition, the corporate reorganization was conducted effective on October 1, 2012 in order to enforce
Pharmaceutical-Related business and build a strong cooperative relationship among Medical-Related, Pharmaceutical-Related and Glass-Related business. As a result of thisreorganization, some business divisions included in Glass-Related business were changed to Pharmaceutical-Related business. The segment information is presented as if theaforementioned reorganization had been conducted at the beginning of the financial year 2012, and the presentation for the prior financial years are not restated.
(*2) Operating income at the operating segment level is not adjusted for intra-segment transactions. See Note 16. “Segment Reporting” to the consolidated financial statements.
(*3) Effective the fiscal year ended March 31, 2012, the Company has adopted ASBJ Statement No.2 “Accounting Standard for Earnings Per Share” (June 30, 2010), ASBJ Guidance
No.4 “Guidance on Accounting Standard for Earnings Per Share” (June 30, 2010) and ASBJ PITF No.9 “Practical Solution on Accounting for Earnings Per Share” (June 30,2010). In addition, the Company has split one share of common stock into two shares on October 1, 2011 based on the resolution at the board of directors’ meeting held on

25 Nipro Corporation Annual Report 2014

Thousands of
U.S. dollars(Note 1)Millions of yen

2010
¥

¥

2009

177,830
118,517
34,52824,338447—
126,145
33,591
18,09419,923
2,102
3,103
64
—
13,872
7,253
15,20918,421
4,846¥

383,397
124,20941,725
138,204
129,122
28,66329,973116,071¥2008

175,945
112,970
52,726
9,554
695—
124,396
36,774
14,775
16,209
4,082
1,772
4
—
9,379
4,531
33,142
18,1095,352¥

330,641
126,739
46,070114,796
119,285
28,66329,97396,560¥2007

172,113
111,084
48,754
11,437838—
123,108
35,32813,677
15,830
3,271
1,890
13
—
8,260
4,454
25,90015,054
6,194¥

349,302
118,81253,911
108,835
120,923
28,66329,975
119,544¥2006

184,363
97,30042,152
12,9191,019
30,973
132,142
39,16813,053
14,334
3,298
1,865
151
270
16,776
8,555
23,093
12,4704,461¥

336,660
104,882
43,128104,105
105,535
28,66329,973127,020

¥

2014

2005

206,801
90,86835,22011,934
1,518
67,261
149,971
44,49812,332
13,430
2,111
1,836
529
578
9,061
4,513
20,874
12,315
3,760¥

338,741
106,195
34,579111,285
113,453
28,66329,972
114,003¥

192,320
82,504
26,207
11,667
1,101
70,841140,072
41,844
10,404
11,039
2,261
1,889
288
115
8,660
4,519
16,312
10,266
3,422$ 2,922,202
2,372,688
500,466
46,415
2,633

293,749
98,78839,12396,242
99,19828,66329,972
98,309$ 6,020,744
1,861,582
441,168
2,436,018
2,263,690
820,035
6,695
1,321,036
U.S. dollars(Note 1)

Yen

¥

114.4
114.1
53.0
1,802.3

¥

71.4
—
32.0
1,498.5

¥

70.2
—
37.5
1,861.8

2,071,716
731,073
119,413
171,939
77,857
5,412
2,099
—
125,253
27,798340,974
244,374
76,671

¥

134.7
—
80.0
1,979.2

¥

69.6
—
37.5
1,767.7

¥

69.4
—
38.5
1,519.6

63,878,505
9,939

63,878,505
9,354

63,878,505
9,020

63,878,505
8,807

63,878,505
9,048

63,878,505
8,617

29.8
5.1
6.9
15.8

28.7
4.3
4.2
21.5

33.8
4.0
3.7
24.8

37.3
3.9
7.2
17.1

33.2
3.9
4.3
26.0

32.9
3.6
4.7
25.6

$

0.18
0.16
0.30
8.09

August 27, 2011. In accordance with this adoption, equity per share, basic earnings per share and diluted earnings per share are calculated on the assumption that thetwo-for-one stock split of common stock was conducted at the beginning of fiscal year ended March 31, 2011. Before the fiscal year ended March 31, 2010, each amount has
been stated in compliance with previous accounting rules.
(*4) Equity ratio is the ratio of the sum of total shareholders’ equity and accumulated other comprehensive income to total assets at the period end. Return on assets is the ratio of
operating income for the period to average of total assets during the period. Return on equity is the ratio of net income for the period to average of the sum of total
shareholders’ equity and accumulated other comprehensive income during the period. Price earnings ratio is the ratio of the closing price of the Company’s shares listed on theFirst Section of the Tokyo Stock Exchange on the last trading day in March of each year to basic earnings per share.

Nipro Corporation Annual Report 2014 26

Consolidated Balance Sheets

Nipro Corporation and its Consolidated Subsidiaries
As of March 31, 2014 and 2013
Thousands of U.S. dollars(Note 1)Millions of yen

2014

2014

2013

AssetsCurrent assets:
Cash and cash equivalents ··········································································¥

70,892¥

92,623$688,807

Time deposits (over three months) ······························································

14,065

13,378

136,660

Trade notes and accounts receivable (Note 5) ·············································

103,179

83,665

1,002,517

Allowance for doubtful receivables ·····························································(2,011)(464)(19,539)

Inventories (Note 3) ····················································································

90,48681,655879,188

Deferred income taxes (Note 4) ··································································

7,354

5,375

71,454

Other current assets ···················································································

12,155

11,742

118,099

Total current assets ················································································

296,120

287,974

2,877,186

Property, plant and equipment (Note 5):
Land ··········································································································

23,36822,173

227,050

Buildings and structures ·············································································

158,109

138,548

1,536,232

Machinery and equipment ··········································································

232,371

206,840

2,257,783

Construction in progress ·············································································

20,53423,787

199,514434,382

391,348

4,220,579

Accumulated depreciation ··········································································(242,788)(216,645)(2,358,997)

Property, plant and equipment-net ·························································

191,594

174,703

1,861,582

Goodwill ····································································································

28,49422,740276,856

Other ·········································································································

13,722

11,525

133,327

Total intangible assets ············································································

42,21634,265410,183

Intangible assets (Note 5):

Investments and other assets:
Investment in unconsolidated subsidiaries
and an affiliate accounted for by the equity method ·······························

11,1392,158

108,230

Investment securities (Note 6) ·····································································

60,95360,983592,237

Lease deposits ····························································································

1,213

815

11,786

Deferred income taxes (Note 4) ··································································

8,454

8,805

82,141Other ·········································································································

7,966

9,599

77,399Total investments and other assets ·························································

89,72582,360871,793

Total ·········································································································¥ 619,655¥ 579,302$ 6,020,744

The accompanying notes are an integral part of these statements.

27 Nipro Corporation Annual Report 2014

Thousands of U.S. dollars(Note 1)Millions of yen

2014

2014

2013

Liabilities and net assets
Current liabilities:
Short-term bank loans (Notes 5 and 10) ·····················································¥

77,630¥83,572$754,275

Current portion of long-term debt (Notes 5 and 10) ···································

68,96544,944670,084

Trade notes and accounts payable ······························································

45,66140,879443,655

Accrued income taxes ·················································································

10,253

3,854

99,621

Accrued expenses ·······················································································

18,453

15,959179,295
23,698

Allowance for loss on clearance of business ················································

2,439

1,955

Commercial papers (Note 10) ·····································································

10,00010,00097,163

Notes and accounts payable for plant and equipment ·································

8,936

5,742

86,825

Other current liabilities ···············································································

8,378

6,853

81,402

Total current liabilities ············································································

250,715

213,758

2,436,018

Long-term debt (Notes 5 and 10) ·······························································

222,837

226,954

2,165,148

Accrued pension and severance liabilities (Note 11) ·····································

—

2,855

—

Net defined benefit liability (Note 11) ·························································

4,043

—

39,283

Deferred income taxes (Note 4) ··································································

1,977

2,213

19,209Other long-term liabilities ···········································································

4,122

4,759

40,050Total long-term liabilities ········································································

232,979

236,7812,263,690

84,39884,398820,035

Long-term liabilities:

Commitments and contingent liabilities (Note 12)
Net Assets (Notes 15):
Common stock ···························································································
Authorized: 400,000,000 shares
Issued: 171,459,479 shares
Capital surplus ····························································································

689

636

6,695

Retained earnings ·······················································································

52,56854,788510,766

Less cost of common shares of treasury stock ·············································(18,000)(865)(174,893)(20,730,973 shares in 2014 and 914,107 shares in 2013)
Total shareholders’ equity ·······································································

119,655

138,957

1,162,603

Unrealized gain (loss) on available-for-sale securities ···································(7,444)(12,547)(72,328)

Deferred gains or losses on hedges ·····························································

38

—

369

Foreign currency translation adjustments ····················································

13,535(6,437)

131,510

Remeasurements of defined benefit plans ···················································

(357)

—

(3,469)

Accumulated other comprehensive income ·············································

5,772(18,984)

56,082

Minority interests ·······················································································

10,534

8,790

102,351

Total net assets ······················································································

135,961

128,763

1,321,036

Total ·········································································································¥ 619,655¥ 579,302$ 6,020,744

The accompanying notes are an integral part of these statements.

Nipro Corporation Annual Report 2014 28

Consolidated Statements of Income

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2014 and 2013
Thousands of U.S. dollars(Note 1)Millions of yen

2014

2013

2014

Net sales ·······································································································
Cost of sales ································································································
Gross profit ································································································¥ 300,753
213,22187,532¥ 241,021
175,31465,707$ 2,922,202
2,071,716
850,486

Selling, general and administrative expenses (Notes 17 and 18)
Operating income ······················································································

75,242
12,29054,336
11,371

731,073
119,413

Other income (expenses):
Interest and dividend income ······································································
Interest expense ·························································································
Loss on sale and disposal of property, plant and equipment-net ·················
Exchange gain (loss) ···················································································
Equity in profit (loss) of an affiliated company ············································
Gain (loss) on sale of investment securities (Note 6) ····································
Loss on impairment of fixed assets ······························································
Other income (loss)-net ··············································································
Income before income taxes and minority interests

2,617(3,857)
(348)
1,345
—
1,322
(2)
(476)
12,891

2,716(3,447)
(320)
3,063
(38)
4,168
(2)
549
18,06025,428(37,476)(3,381)
13,068—
12,845(19)(4,625)125,253

Income taxes (Note 4):
Current ······································································································
Deferred ·····································································································

13,740(3,951)

6,865
575

133,502(38,389)

Net income before minority interests ·······················································

3,102

10,62030,140Minority interests in income (loss) of consolidated subsidiaries
Net income ································································································

¥

241
2,861

¥

388
10,232$

U.S. dollars(Note 1)

Yen

Amounts per common share:
Basic earnings ····························································································
Diluted earnings ·························································································Cash dividends ···························································································

¥

18.2
16.3
30.5

2,342
27,798

¥

60.0
54.1
27.5

$

0.18
0.16
0.30

The accompanying notes are an integral part of these statements.

Consolidated Statements of Comprehensive Income

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2014 and 2013
Thousands of U.S. dollars(Note 1)Millions of yen

2014
Net income before minority interests ·······················································
Other comprehensive income:Unrealized gain (loss) on available-for-sale securities ·······························
Deferred gains or losses on hedges ·························································
Foreign currency translation adjustment ·················································
Comprehensive income ··············································································
Comprehensive income attributable to:Shareholders of the parent ·····································································
Minority interests ···················································································
The accompanying notes are an integral part of these statements.

29 Nipro Corporation Annual Report 2014

¥

3,102

¥

5,104
38
21,25929,503
27,975
1,528

2014

2013
¥

10,620$30,140¥(6,018)—
10,266
14,86849,592
370
206,558$ 286,660

13,985883

271,813
14,847

Consolidated Statements of Changes in Net Assets

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2014 and 2013
Thousands
Outstanding
number ofshares ofcommonstock

Balance at March 31, 2012 ····Net income ································

Increase (decrease) in retained
earnings due to inclusion of new
subsidiaries in consolidation ······Cash dividends ··························
Purchase of treasury stock ········
Disposal of treasury stock ·········
Decrease of retained earnings(Other) ····································
Other net change during
the year ··································
Balance at March 31, 2013 ····Net income ································
Increase (decrease) in retained
earnings due to inclusion of new
subsidiaries in consolidation ······Cash dividends ··························
Purchase of treasury stock ········
Disposal of treasury stock ·········
Decrease of retained earnings(Other) ····································
Other net change during
the year ··································
Balance at March 31, 2014 ····

170,546 ¥84,398 ¥CapitalsurplusRetainedearnings

636 ¥ 48,389 ¥
10,232

Treasurystock(865) ¥ 132,558 ¥
10,232320(4,009)
(1)
0

(0)
0

(0)
(144)

170,545

84,398636

54,788
2,861

(865)

—
(5,055)(18,179)
1,044

53
(26)

170,545 ¥Thousands
Outstanding
number ofshares ofcommonstock

Balance at March 31, 2013 ····Net income ································
Increase (decrease) in retained
earnings due to inclusion of new
subsidiaries in consolidation ·····Cash dividends ··························
Purchase of treasury stock ········
Disposal of treasury stock ·········
Decrease of retained earnings(Other) ····································
Other net change during
the year ··································
Balance at March 31, 2014 ····

Commonstock

84,398 ¥Commonstock

170,545 $ 820,035 $689 ¥CapitalsurplusRetainedearnings

6,179 $ 532,336 $
27,798Treasury
stock

(252)

— ¥ (16,209) ¥— ¥ (22,737) ¥Minority
interests

Total
net assets

4,130 ¥ 113,951
10,232320(4,009)
(0)
0

(144)

(144)

—
138,957
2,861(6,019)(12,547)

—
—

9,772
(6,437)——

3,753(18,984)

4,660
8,790

8,413
128,7632,861—(5,055)(18,179)
1,097—(5,055)(18,179)
1,097

(26)

(26)
5,103
(7,444) ¥38
38 ¥19,972
13,535 ¥(357)(357) ¥

24,756
5,772 ¥

Thousands of U.S. dollars (Note 1)
RemeasureUnrealized Deferred
Foreignments Accumulated
Total
gain ongains orcurrencyof defined other comshareholders’ available- lossesontranslationprehensive
benefitequityfor-salehedges adjustments
incomeplans
securities(8,405) $1,350,145 $ (121,910) $27,798(176,632)
10,144516(6,528) ¥RemeasureForeign
ments Accumulated
currencyof defined other comtranslationprehensive
benefitadjustments
incomeplans

320(4,009)(0)0—52,568 ¥ (18,000) ¥ 119,655 ¥—(49,116)

170,545 $ 820,035 $Millions of yen
Unrealized Deferred
Totalgain ongains orshareholders’ available- lossesonequityfor-salehedgessecurities— $ (62,544) $— $ (184,454) $1,744
26,50010,534 ¥ 135,961

Minority
interests

Total
net assets

85,406 $1,251,097
27,798—(49,116)(176,632)
10,660—(49,116)(176,632)
10,660

(252)

(252)

—
49,582
6,695 $ 510,766 $ (174,893) $1,162,603 $ (72,328) $369
194,054369 $ 131,510 $(3,469) 240,536
16,945
257,481(3,469) $ 56,082 $ 102,351 $1,321,036

The accompanying notes are an integral part of these statements.

Nipro Corporation Annual Report 2014 30

Consolidated Statements of Cash Flows

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2014 and 2013
Thousands of U.S. dollars(Note 1)Millions of yen

2014
Operating activities:
Net income ···································································································
Adjustments to reconcile net income to net cash provided operating activities:
Depreciation and amortization ··································································
Amortization of goodwill ··········································································
Loss on impairment of fixed assets ····························································
Equity in loss (profit) of an affiliated company ···········································
Allowance for doubtful receivables ····························································
Gain on sales of available for sales securities ··············································
Provision for deferred taxes ·······································································
Exchange loss (gain) ··················································································
Loss on devaluation of marketable securities ··············································
Loss on sale and disposal of property, plant and equipment-net ················
Other, net ·································································································

¥

2,861

2014

2013
¥

10,232$

27,79825,151
4,827
2
—
1,072
(1,161)(3,951)(2,998)10342
739

21,210
2,834
2
38
194
(4,164)575(1,694)28320
426

244,374
46,901
19—
10,416(11,281)(38,389)(29,129)
97
3,323
7,180

Changes in operating assets and liabilities:
Trade receivables ·······················································································
Inventories ································································································
Other current assets ··················································································
Lease deposits ···························································································
Trade payables ··························································································
Accrued income taxes ···············································································
Other, net ·································································································
Total adjustments ·················································································Net cash provided by operating activities ···············································(10,730)(2,441)
2,061(212)(2,468)6,468
1,980
18,691
21,552(8,965)(3,183)
518
(178)
(830)
990
4,241
12,362
22,594(104,256)(23,717)
20,025(2,060)(23,980)
62,845
19,239181,607
209,405

Investing activities:
Purchase of property, plant and equipment ···················································
Proceeds from sales of property, plant and equipment ···································
Purchase of available-for-sale securities ··························································
Purchase of investments in unconsolidated subsidiaries ·································
Proceeds from sales of available-for-sale securities ·········································
Purchases of investments in consolidated subsidiaries affecting scope of consolidation ·····
Proceeds from investments in consolidated subsidiaries affecting scope of consolidation ··Proceeds from sale of investments in subsidiaries and affiliates ······················Net decrease (increase) in short-term loans to affiliates ··································
Deposits (Over three months) ········································································
Other, net ·····································································································Net cash used in investing activities ·······················································(27,921)379(627)(6,780)
9,059(6,959)
—
—
—
1,125
(214)
(31,938)(36,254)152(11,567)(3,825)18(2,386)
3,216
5,800
1,813
7,776
(2,174)(37,431)(271,288)
3,682(6,092)(65,876)
88,020(67,616)———
10,931(2,080)(310,319)

Financing activities:
Net increase (decrease) in short-term loans ····················································
Proceeds from long-term loans ······································································
Repayment of long-term loans ······································································
Proceeds from issuance of bonds ··································································
Repayment of bonds ·····················································································
Proceeds from issuance of common stock ·····················································
Proceeds from sales of treasury shares ···························································
Purchase of treasury shares ···········································································Cash dividends paid ······················································································
Other, net ·····································································································Net cash provided by financing activities ··············································(9,340)63,280(49,029)
2,980(1,282)
151
1,196(18,278)(5,057)(967)(16,346)

9,445
61,629(43,039)
9,941(10,100)
262——(4,009)(770)
23,359(90,750)
614,846(476,380)
28,955(12,456)
1,467
11,621(177,594)(49,135)(9,396)(158,822)

4,982(21,750)
92,623

3,031
11,55379,45048,407(211,329)
899,951

1,620
92,623185$ 688,807

Effect of exchange rate changes on cash and cash equivalents ···············Net increase (decrease) in cash and cash equivalents ·······························Cash and cash equivalents, beginning of period ·······································Cash and cash equivalents of newly consolidated subsidiary,
beginning of period ··················································································Cash and cash equivalents, end of period ··················································
The accompanying notes are an integral part of these statements.

31 Nipro Corporation Annual Report 2014¥

19
70,892¥

Notes to Consolidated Financial Statement

1. Basis of Presenting Consolidated Financial Statements
The financial statements of Nipro Corporation (“the Company”) andits consolidated domestic subsidiaries have been prepared inaccordance with the provisions set forth in the Financial Instruments
and Exchange law of Japan and its related accounting regulations,and in conformity with accounting principles generally accepted inJapan, which are different in certain respects as to application anddisclosure requirements of International Financial ReportingStandards. Effective from the year ended March 31, 2009, theCompany has adopted the “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements” (PITF No. 18) and as a result, the accounts ofconsolidated overseas subsidiaries are prepared in accordance witheither International Financial Reporting Standards or generally
accepted accounting principles in the United States, withadjustments for the specified five items as applicable.
In preparing the accompanying consolidated financial statements,
certain reclassifications have been made to the consolidated financial

statements issued domestically, in order to present them in a form
which is more familiar to readers outside Japan. However, no
adjustment has been made which would change the financial
position or the results of operations presented in the original
financial statements. In addition, the notes to consolidated financial
statements include additional information which is not required
under generally accepted accounting principles and practices inJapan.
The financial statements presented herein are expressed inJapanese yen and, solely for the convenience of the reader, havebeen translated into United States dollars at the rate of¥102.92=US$1, the approximate exchange rate on March 31,
2014. These translations should not be construed as representations
that the Japanese yen amounts have been, could have been, or
could in the future be, converted into U.S. dollar amounts at that or
any other rate.

2. Summary of Significant Accounting Policies(a) Basis of Consolidation(d) Allowance for Doubtful Receivables

The consolidated financial statements include the accounts of theCompany and the significant subsidiaries and affiliated company
accounted for by the equity method.
Investments in unconsolidated subsidiaries are stated at cost andthe equity method is not applied for the valuation of suchinvestments since they are considered immaterial in the aggregate.
All significant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized profits included
in assets resulting from transactions within the Company and its
consolidated subsidiaries have been eliminated. The difference
between the cost of investments in subsidiaries and affiliates and theequity in their net assets at the dates of acquisition is amortized on astraight-line basis over five to twenty years.
All accounts herein have been presented on the basis of thetwelve months ended March 31, 2014 for the Company and forconsolidated domestic subsidiaries, and December 31, 2013 for all
consolidated overseas subsidiaries.
Adjustments have been made for any significant intercompany
transactions which took place during the period between the end of
accounting period of the consolidated overseas subsidiaries and thatof the Company.

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

(b) Translation of Foreign Currencies
Balance sheets of consolidated overseas subsidiaries are translated
into Japanese yen at the current exchange rates as of the balance
sheet date except for shareholders’ equity, which is translated at thehistorical rates. Income statements of consolidated overseas
subsidiaries are translated into Japanese yen at the average exchange
rates for the period. Resulting translation adjustments are shown as“Foreign currency translation adjustments” in “Accumulated othercomprehensive income” section of net assets.

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

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

(f) Property, Plant and Equipment
Depreciation of property, plant and equipment of the Company andits consolidated domestic subsidiaries is computed principally by the
declining-balance method. The straight-line method is applied tobuildings acquired by the domestic companies after April 1, 1998,
and is principally applied to the property, plant and equipment ofconsolidated overseas subsidiaries.

(g) Intangible Assets
Amortization of intangible assets, including software for theCompany’s own use, is computed by the straight-line method overthe estimated useful life of the asset.
Goodwill is amortized on a straight-line basis over the period theCompany benefits from its use. If the amount is not significant, it isexpensed when incurred.

(h) Investment Securities
Investment securities are classified and accounted for, depending on
management’s intent, as follows:i) held-to-maturity debt securities, which are expected to be held
to maturity with the positive intent and ability to hold tomaturity are stated at amortized costii) available-for-sale securities, which are not classified as theaforementioned securities, are stated at fair value. Unrealized
gains and losses, net of applicable taxes, are reported as“Accumulated other comprehensive income” of net assets.
Non-marketable available-for-sale securities are stated at cost
determined by the average method.
For other than temporary declines in fair value, investment
securities are reduced to net realizable value by a charge to income.

Nipro Corporation Annual Report 2014 32

(i) Allowance for Loss on Clearance of Business(o) Amounts per Common Share

The Company has withdrawn from retail business and a provision for
anticipated losses of sales of related fixed assets is provided.

Basic earnings per share is computed by dividing net income
available to common shareholders by the weighted-average numberof common shares outstanding for the period. Diluted earnings per
share reflect the potential dilution that could occur if securities were
exercised or converted into common stock. Diluted earnings per
share of common stock assume full conversion of the outstanding
convertible notes and bonds at the beginning of the year (or at thetime of issuance) with an applicable adjustment for related interest
expense, net of tax, and full exercise of outstanding warrants.

(j) Employees’ Retirement and Severance Benefits
Method of attributing expected benefit to periods
In calculating retirement benefit obligation, the estimated amount of
retirement benefit is attributed to the periods on the straight-line
basis.
Accounting Method of Actuarial gains and losses and priorservice costs
Prior service costs are amortized on the straight-line basis overcertain period (mainly 5 years) which is within the average of theestimated remaining service years of the employees when they occur.
Actuarial gains and losses are amortized on the straight-line basis
over certain period (mainly 5 years) which is within the average ofthe estimated remaining service years of the employees commencing
with from the following the year which they arise.

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

(l) Leases
Finance leases, except for certain immaterial leases, are capitalized in
the balance sheet. Amortization of finance lease assets is calculated
by straight-line method over the lease period assuming no residual
value.
The Company and its consolidated domestic subsidiaries accountfor certain finance leases as operating leases, which do not transfer
ownership to the lessee and existed prior to April 1, 2008. The
information of such leases on “as if capitalized” basis is presented in
Note 7. “Leases”.

(m) Hedge Accounting<Method of hedge accounting>
The deferral hedge accounting method is applied in principle. The
allocation method is applied to currency swap and theexceptional accounting method is applied to interest rate swap
when certain hedging criteria are met.
<Hedge instrument and hedge items>(Hedging instruments) (Hedged items)
Currency swap
Short-term and long term debt
denominated in foreign currency
Interest rate swap
Interests on short-term and long term debt
<Hedge policy>
The Company uses currency swaps and interest rate swaps toreduce currency exposure and interest volatility risk.
<Method for assessing hedge effectiveness>
Hedge effectiveness is not assessed for currency swap whichmeets certain criteria of the allocation method and interest rate
swaps which meets certain criteria of the exceptional accounting
method.

(n) Income Taxes
The provision for income taxes is computed based on income forfinancial statement purpose. The asset and liability approach is used
to recognize deferred tax assets and liabilities for the future tax
consequences of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes andthe amounts used for income tax purposes.

33 Nipro Corporation Annual Report 2014(p) Changes in Accounting Policy
Application of Accounting Standard for Retirement Benefits and
its Guidance
The Company applied “Accounting Standard for Retirement
Benefits” (ASBJ Statement No.26, May 17, 2012) and “Guidance on
Accounting Standard for Retirement Benefits” (ASBJ Guidance
No.25, May 17, 2012) effective the end of the fiscal year; except forthe provisions specified in Paragraph 35 of Accounting Standard for
Retirement Benefits and Paragraph 67 of Guidance on AccountingStandard for Retirement Benefits. Under the new accounting policy,
the amount of retirement benefit obligations minus plan assets isrecorded as net defined benefit liability, and the unrecognizedactuarial gains and losses and unrecognized prior service costs arerecognized in net defined benefit liability (in case that the amount ofplan assets exceeds retirement benefit obligation, it is recorded as
net defined benefit asset). In applying the Accounting Standard for
Retirement Benefits and its Guidance, the Company follows theprovisional treatment prescribed in Paragraph 37 of AccountingStandard for Retirement Benefits. Consequently, the effects of thechanges in accounting policies were recognized in remeasurementsof defined benefit plans as accumulated other comprehensive
income in the fiscal year ended March 31, 2014.
As a result, as of March 31, 2014, net defined benefit asset of¥98 million (US$952 thousand), and net defined benefit liability of¥4,043 million (US$39,283 thousand) were recorded respectively.
Also, the above impacts were to decrease accumulated othercomprehensive income by ¥357 million (US$3,469 thousand).

(q) Unapplied Accounting Standards, etc.
Accounting Standard for Retirement Benefits (Accounting Standards
Board of Japan (ASBJ) Statement No.26 of May 17, 2012), andGuidance on Accounting Standard for Retirement Benefits (ASBJ
Guidance No.25 of May 17, 2012)
1) Outline
Under the revised accounting standard, actuarial gains and losses
and past service costs shall be recognized within net assets on the
consolidated balance after adjusting for tax effects, and theaccumulated deficit or surplus shall be recognized as a liability orasset. Also, regarding the estimated amount of retirement benefits
and the method of attributing them to accounting periods, inaddition to the straight line attribution standard, the benefit formula
may be used and the method of calculating the discount rate has
been revised.
2) Scheduled Date of Adoption
The revision to how retirement benefit obligations and current
service costs are determined will be adopted from the start of theyear ending March 31, 2015.
3) Impact of Adoption of New Accounting Standard
The impact in the consolidated financial statements as a result of the
adoption of this accounting standard is currently being evaluated.

3. Inventories
Inventories consisted of the following:Thousands of U.S. dollars(Note 1)Millions of yen

Finished goods and merchandises ···································································
Raw materials ·································································································
Work in process ·····························································································
Packing and other ··························································································
Total ······································································································

2014¥ 59,517
16,387
10,9683,614¥ 90,4862013
53,89913,916
10,4803,360¥ 81,655¥

2014$ 578,284
159,221106,568
35,115$ 879,188

4. Income Taxes
The Company and its domestic subsidiaries are subject to several taxes based on income which, in aggregate, resulted in a normal statutory tax
rate of approximately 37.8% for the years ended March 31, 2014 and 2013.
The significant components of deferred tax assets and liabilities were as follows:
Thousands of U.S. dollars(Note 1)Millions of yen

2014
Deferred tax assets
Tax loss carryforwards ············································································
Intercompany profits ··············································································
Valuation loss on inventories ··································································
Allowance for bonuses to employees ······················································
Allowance for loss on clearance of business ············································
Sales Allowance ·····················································································
Loss on impairment of fixed assets ··························································
Excess of allowance for doubtful accounts over tax allowable amounts ·····
Accrued pension and severance liabilities ················································Net defined benefit liability ·····································································
Accrued enterprise taxes ·········································································
Unrealized loss on available-for-sale securities ·········································
Goodwill ································································································
Other ·····································································································
Gross deferred tax assets ············································································
Less: Valuation allowance ···········································································
Total deferred tax assets ·············································································
Deferred tax liabilities
Unrealized gain on available-for-sale securities ········································
Revaluation reserve for land ····································································
Revaluation reserve for intangible assets ·················································
Revaluation reserve for fixed assets – other ·············································
Other ·····································································································
Total deferred tax liabilities ·········································································Net deferred tax assets (liabilities) (*1) ····························································

¥

9,061
1,535
1,031
1,013
863
246
119
1,012
—
1,313
747
4,831
2,045
4,170
¥ 27,986(10,604)¥ 17,382

¥
¥

443
676
1,194
682
590
3,584
13,798

2013

2014

¥

5,135
518
854
918
739
230
613
900
864
—
362
6,974
—
2,826
20,933(5,896)15,037$ 88,039
14,914
10,017
9,843
8,384
2,389
1,156
9,833
—
12,757
7,258
46,93919,87040,517$ 271,916(103,031)$ 168,885

¥
¥

5
674
1,427
496
486
3,087
11,9504,304
6,568
11,601
6,627
5,733$ 34,833$ 134,052¥¥

Reconciliation of the differences between the statutory tax rates and the effective income tax rates was as follows:
Statutory tax rate ···································································································································
Expenses not deductible for tax purposes ···························································································
Non-taxable dividend income ············································································································
Loss in subsidiaries ····························································································································
Amortization of goodwill ···················································································································Tax credits primarily for research and development costs ····································································Tax loss carryforwards ························································································································
Valuation Allowance ··························································································································
Other ················································································································································
Effective income tax rate ························································································································

2014
37.8%
4.9
(3.3)
—
13.7
(5.3)
—
17.2
10.9
75.9

2013
37.8%
2.0
(3.1)
1.6
5.5
(2.5)
(0.5)
7.6
(7.2)
41.2

(*1) The current portion of Deferred Tax Liabilities for the year ended March 31, 2014 is ¥34 million (US$327 thousand) and is accounted for as “Others” of Current Liabilities.
* Adjustment of deferred tax assets and liabilities following the change in the statutory tax rates“Act on Partial Revision of the Income Tax Act” was promulgated on March 31, 2014 and the imposition of a special reconstruction corporation tax will be abolished from the fiscal
year beginning on April 1, 2014.
Accordingly, the statutory tax rates for calculating deferred tax assets and liabilities has changed from 37.8% of the previous fiscal year to 35.4% for temporary differences that are
expected to be eliminated from the fiscal year beginning on April 1, 2014.
Following these changes, net deferred tax assets decreased ¥273 million (US$2,653 thousand), while income taxes deferred increased the same amount.

Nipro Corporation Annual Report 2014 34

5. Pledged Assets
The following assets were pledged as collateral:
Millions of yen¥

Buildings and structures ····································································
Machinery and equipment ·································································
Land ··································································································
Trade notes receivable ·······································································
Other ································································································
Total ·····························································································¥

2014
12,703
2,701
2,606
7,158
13,037
38,205¥¥

Thousands of U.S. dollars (Note 1)

2013
11,042
2,373
3,010
5,485
10,42032,3302014
123,426
26,24425,321
69,549126,671371,211$$

The above assets were pledged against the following liabilities:
Millions of yen¥

Short term bank loans ·······································································
Current portion of long-term debt ·····················································
Long-term debt ·················································································
Total ·····························································································

¥

2014
2,029
1,508
6,748
10,285¥¥

Thousands of U.S. dollars (Note 1)

2013
1,887
2,383
5,884
10,1542014
19,714
14,65265,56599,931$$

6. Investment Securities
Investment securities as of March 31, 2014 and 2013 consisted of the followings:
Millions of yen

2014
Non-current:
Marketable:
Marketable equity securities ·······················································
Investment trust funds and other ···············································Sub total ···················································································
Non-marketable securities ·····························································
Total ·························································································¥

59,473059,473
1,480
60,953¥¥¥Thousands of U.S. dollars (Note 1)

2014

2013

¥

$

59,14649
59,195
1,788
60,983

¥
¥
¥

$
$
$

577,8570
577,857
14,380592,237

The carrying amounts and aggregate fair values of marketable securities for investments as of March 31, 2014 and 2013 were as follows:
Millions of yen

2014
Available-for-sale securities
Equity securities ·············································································
Debt securities and other ·······························································
Total ·························································································

¥
¥

Cost

Unrealized gain

Unrealized loss

72,000—72,000

¥

¥

¥

7,185
—
7,185

¥

Fair Value

19,712—
19,712¥¥59,473—59,473Thousands of U.S. dollars (Note 1)

2014
Cost

Available-for-sale securities
Equity securities ···········································································
Debt securities and other ·····························································
Total ························································································$ 699,572—$ 699,572

Unrealized gain

Unrealized loss

Fair Value$$ 191,527—$ 191,527$ 577,857—$ 577,857$

69,812—
69,812Millions of yen

2013
Available-for-sale securities
Equity securities ···········································································
Debt securities and other ·····························································
Total ························································································

¥
¥

Cost

Unrealized gain

Unrealized loss

79,41947
79,466

¥

¥

¥

4,300
2
4,302

¥

Fair Value

24,573—
24,573¥¥59,14649
59,195

Proceeds from sales of securities and gross realized gains or losses on those sales for the years ended March 31, 2014 and 2013 were as follows:
Millions of yen

Proceeds ·························································································
Gains on sales ·················································································
Losses on sales ················································································

35 Nipro Corporation Annual Report 2014

¥

2014
9,059
1,322
161

Thousands of U.S. dollars (Note 1)

2013
¥

18
9
3

$

2014
88,02012,8451,564

7. Leases
Finance leases entered into prior to April 1, 2008 that do not transfer ownership of leased property to the lessee are accounted for as if they wereoperating leases. The details of such finance leases accounted for as operating leases at March 31, 2014 and 2013 were as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen¥

Acquisition cost ···············································································
Accumulated depreciation ·······························································Net leased property ·········································································

¥

2014
123
121
2

¥
¥

2013
221
217
4

$
$

Millions of yen

2014¥

Payments due within one year ·························································
Payments due after one year ····························································
Total ···························································································¥

Thousands of U.S. dollars (Note 1)

2014

2013
3
0
3

2014
1,195
1,176
19

¥

$

7
1
8

¥

29
0
29

$

Lease payments under such leases for the years ended March 31, 2014 and 2013 were ¥13 million (US$126 thousand) and ¥56 million, respectively.

8. Financial Instruments(1) Circumstances on financial instruments

foreign currency are exposed to the risk of fluctuation in foreign
currency exchange rates.
Short-term loans payable are mainly borrowed to raise operating
capital and long-terms loans payable are mainly borrowed to makecapital expenditures. A part of long-term loans with the floatinginterest rate has the risk of interest rate fluctuation, but theCompany and its consolidated subsidiaries use interest rate swap tosolidify the interest rate. For some of the loans denominated inforeign currency, the Company and its consolidated subsidiaries use
currency swap to hedge the currency fluctuation risk.
Bonds and commercial papers are mainly issued to raise thefunds for bonds retirement.
Lease obligations are mainly for the capital expenditures, freefrom interest-rate risk because the interest rate is fixed.
Payables, loans and bonds are exposed the liquidity risk, but theCompany and its consolidated subsidiaries manage the risk by
establishing cash planning.

(a) Policy for financial instruments
The Company and its consolidated subsidiaries manage the temporary
surplus funds by deposit with banks that have a high level of safety.
The Company and its consolidated subsidiaries raise funds forbusiness operation with mainly bank loans and bonds considering
their business investment and cash planning.

(b) Details and risk of financial instruments and its risk
management
Receivable such as trade notes and accounts receivable are exposed
to customer’s credit risk. Receivables denominated in foreign
currencies are exposed to the market risk of fluctuation in foreign
currency exchange rates.
In order to reduce the customer’s risk, the Company monitors thedues and balances by customer in accordance with the Company’s
regulations of credit administration.
Investment securities are exposed to the market fluctuation risk,
but mainly consist of equity of the companies which conductbusiness with the Company. The Company periodically reviews themarket price of such securities.
Payables such as trade notes, accounts payable and accounts
payable other are due within 1 year. Payables denominated in(c) Supplemental information on fair values of financial
instruments
Fair values of financial instruments include values based on market
price and reasonably estimated values when market price is notavailable. Because variable factors are counted in the estimation, theestimated values may vary by adopting different assumptions.

(2) Fair values of financial instruments
The book values, fair values and the differences between them as of March 31, 2014 and 2013 are as follows (Financial instruments for which themarket value is extremely difficult to determine are not included as described in remark 2.):Millions of yen

Millions of yen

2014Book value

Cash and cash equivalents, time deposits ·······
Trade notes and accounts receivable,
net of allowance for doubtful receivables ···Investment securities ······································
Assets total ····················································
Trade notes and accounts payable ·················
Short-term bank loans, current portion of
long-term debt, and commercial paper ······
Other notes and account payable (*1) ············
Long-term debt ·············································
Lease obligations (*2) ····································
Liabilities total¥

84,957¥¥101,168
66,058252,183
45,661¥

156,595
17,500222,8372,460
445,0532013

Fair value¥

84,957¥¥101,168
66,058252,183
45,661¥

156,595
17,500221,9412,369
444,066

Difference

¥

—

¥
¥

—
—
—
—

¥

—
—
896
91
987

Book value¥

106,001¥¥

83,201
59,195248,397
40,879¥138,516
14,028226,9543,053
423,430

Fair value¥

106,001¥¥

83,201
59,195248,397
40,879¥138,516
14,028226,520
2,911
422,854

Difference

¥

—

¥
¥

—
—
—
—

¥

—
—
434
142
576

Nipro Corporation Annual Report 2014 36

Thousands of U.S. dollars (Note 1)

2014
Book value

Cash and cash equivalents, time deposits ·······
Trade notes and accounts receivable,
net of allowance for doubtful receivables ···Investment securities ······································
Assets total ····················································
Trade notes and accounts payable ·················
Short-term bank loans, current portion of
long-term debt, and commercial paper ······
Other notes and account payable (*1) ············
Long-term debt ·············································
Lease obligations (*2) ····································
Liabilities total$

Fair value

825,466$

Difference

825,466

982,977
641,839$ 2,450,282$ 443,655

982,977
641,839$ 2,450,282$ 443,655

1,521,522
170,035
2,165,148
23,902$ 4,324,262

1,521,522
170,035
2,156,442
23,018$ 4,314,672

$

—

$
$

—
—
—
—

$

—
—
8,706
884
9,590

(*1) This is included in accrued expenses and notes andaccounts payable for plant and equipment on thebalance sheet.
(*2) This is included in other current liabilities and otherlong-term liabilities on the balance sheet.

Remark 1 Methods used to calculate fair values of financial instruments and the details of securities<Assets>• Cash and cash equivalents, time deposits and trade notes and accounts
receivable
Cash and cash equivalents and trade notes and accounts receivable are statedat the relevant book value because the settlement periods are short and the fairvalues are almost the same as the book value.
• Investments securities
Equity securities are stated at market value. See Note 6. “Investment securities”
for the detailed information by classification.
<Liabilities>• Trade notes and accounts payable and short-term bank loans and current
portion of long-term debt and commercial paper
Because the settlement periods of the above items are short and their fair values
are almost the same as their book values, the relevant book values are used.

• Other notes and account payable
Because the settlement periods of the above items are short and their fairvalues are almost the same as their book values, the relevant book values areused.
• Long-term debt
The fair value of long-term debt is calculated by applying a discount rate to thetotal of principal and interest. The discount rate is based on the assumed
interest rate if a similar new loan was entered into.
• Lease obligation
The fair value of lease obligations is calculated by applying a discount rate to
the total of principal and interest. The discount rate is based on the assumed
interest rate if a current lease transaction was renewed.

Remark 2 Financial instruments for which the fair value is extremely difficult to determine
Millions of yen¥

Unlisted equity securities ································

2014
6,034

Thousands of U.S. dollars (Note 1)

¥

2013
3,946

$

2014
58,628Because these items have no market value and are difficult to estimate the future cash flow and it is extremely difficult to determine their fair values, they are not included ininvestment securities above.

Remark 3 Planned redemption amounts after the balance sheet date for monetary receivables with maturity dates are as follows:
Millions of yen

Cash and cash equivalents, time deposits ·······
Trade notes and accounts receivable ··············

Thousands of U.S. dollars (Note 1)

2014

2013

2014

Within 1 year

Within 1 year

Within 1 year¥¥

$ 825,466
982,987

84,957101,169

106,001
83,201

Remark 4 Planned repayment amounts after the balance sheet date for monetary payables with maturity dates
Planned repayment amounts after the balance sheet date for monetary payables with maturity dates at March 31, 2014 are as follows:
Millions of yen

2014

Trade notes and accounts payable ················
Short-term bank loans, current portion of
long-term debt, and commercial paper ······
Other notes and account payable ··················
Long-term debt ·············································
Lease obligations ···········································
Total ······························································

Within 1 year

Over 1 year but
within 2 years

Over 2 years but
within 3 years

Over 3 years but
within 4 years

Over 4 years but
within 5 years

Over 5 years¥

45,661

¥

—

¥

—

¥

—

¥

—

¥

—

¥

156,595
17,500—949
220,705¥——
72,138574
72,712¥——
62,349301
62,650¥——53,456
139
53,595¥——
15,07765
15,142¥——
19,817432
20,249Thousands of U.S. dollars (Note 1)

2014

Trade notes and accounts payable ··················
Short-term bank loans, current portion of
long-term debt, and commercial paper ······
Other notes and account payable ··················
Long-term debt ·············································
Lease obligations ···········································
Total ······························································
37 Nipro Corporation Annual Report 2014

Within 1 year

Over 1 year but
within 2 years

Over 2 years but
within 3 years

Over 3 years but
within 4 years

Over 4 years but
within 5 years

Over 5 years

$

$

—

$

—

$

—

$

—

$

—

$

—
—
700,913
5,577
706,490$——
605,801
2,925
608,726$——
519,394
1,351
520,745$——
146,492
632
147,124$——
192,548
4,196
196,744443,655

1,521,522
170,035—
9,221$ 2,144,433

9. Derivatives
The Company and its consolidated subsidiaries had the following derivatives contracts outstanding at March 31, 2014 and 2013.

(1) Derivatives for which hedge accounting has not been applied.
(a) Currency related
N/A in 2014
Millions of yen

2013
Contract amountType of Derivatives

Transaction other thanmarket transaction

Currency option
Buying call option/U.S. dollars
Selling put option/U.S. dollars
Currency swap
Buying U.S. dollars

Over 1 year out of contract amount

Fair value

¥

279
564

¥

—
—

¥

3
(42)

¥

752

¥

—

¥

(125)

(b) Interest related
Millions of yen

2014
Transaction other thanmarket transaction

Type of Derivatives

Contract amountOver 1 year out of contract amountInterest rate option
Interest rate swap
To receive variable/To pay fixed

¥

73

¥

—

¥

Fair value

0

¥

60

¥

40

¥

(5)

Thousands of U.S. dollars (Note 1)

2014
Transaction other thanmarket transaction

Type of Derivatives

Contract amountOver 1 year out of contract amountInterest rate option
Interest rate swap
To receive variable/To pay fixed

$

709

$

—

$

Fair value

0

$

583

$

389

$

(49)

Millions of yen

2013
Transaction other thanmarket transaction

Type of Derivatives

Contract amountOver 1 year out of contract amountInterest rate option
Interest rate swap
To receive variable/To pay fixed

¥

57

¥

—

¥

Fair value

0

¥

72

¥

47

¥

(6)

Fair value is based on information provided by financial institution at the end of fiscal year.

(2) Derivatives for which hedge accounting has been applied.
(a) Interest related
Millions of yen

2014
Method of hedge accounting

Principle method
Exceptional accounting method of interest rate swap

Type of Derivatives

Principal Hedge item

Interest rate swap
Interest rate swap

long-term loans
long-term loans

Contract amount

¥
¥

258
3,216

Over 1 year out of contract amount

¥
¥

194
2,719

Fair value

¥

3
(*1)

Thousands of U.S. dollars (Note 1)

2014
Method of hedge accounting

Principle method
Exceptional accounting method of interest rate swap

Type of Derivatives

Principal Hedge item

Interest rate swap
Interest rate swap

long-term loans
long-term loans

Contract amount

$
$

2,507
31,248Over 1 year out of contract amount

$
$

1,885
26,419Fair value

$

29
(*1)

Millions of yen

2013
Method of hedge accounting

Exceptional accounting method of interest rate swap

Type of Derivatives

Principal Hedge item

Interest rate swap

long-term loans

Contract amount

¥

2,864

Over 1 year out of contract amount¥

Fair value

2,216

(*1)

(b) Currency related
Millions of yen

2014
Method of hedge accounting

Principle method
Allocation method of forward foreign exchange contract, etc.

Type of Derivatives

Principal Hedge item

Contract amountCurrency swap
Currency swap

Account Receivablelong-term loans

¥
¥

526
1,268

Over 1 year out of contract amount

¥
¥

—
1,196

Fair value

¥

42
(*1)

Nipro Corporation Annual Report 2014 38

Thousands of U.S. dollars (Note 1)

2014
Method of hedge accounting

Principle method
Allocation method of forward foreign exchange contract, etc.

Type of Derivatives

Principal Hedge item

Contract amountCurrency swap
Currency swap

Account Receivablelong-term loans$$

Over 1 year out of contract amount

5,111
12,320$$Fair value

$ 408
(*1)

—
11,621Millions of yen

2013
Method of hedge accounting

Allocation method of forward foreign exchange contract, etc.

Type of Derivatives

Principal Hedge item

Currency swap

long-term loans

Contract amount¥Over 1 year out of contract amount

1,339

¥

Fair value

1,268

(*1)

(*1) The fair value of interest rate swap to which the exceptional accounting method is applied and the fair value of forward foreign exchange contract etc. to which the allocation
method is applied are included in the fair value of long-term loans in Note 8. “Financial Instruments” because such interest rate swap and forward foreign exchange contract
etc. are accounted for as a single item with the corresponding long-term loans.

10. Short-Term Loans and Long-Term Debt
Short-term loans comprised overdrafts and promissory notes.
The weighted-average interest rates of short-term bank loans for the years ended March 31, 2014 and 2013 were 1.005% and 1.001%, respectively.
The weighted-average interest rate of commercial paper for the years ended March 31, 2014 and 2013 were 0.104% and 0.112% respectively.
Long-term debt comprised the following:
Millions of yen

1.37% unsecured bonds due 2014 ··································································
2.04% unsecured bonds due 2018 ··································································
0.877% unsecured bonds due 2016 ································································
0.83% unsecured bonds due 2016 ··································································
1.09% unsecured bonds due 2018 ··································································
0.61% unsecured bonds due 2019 ··································································
Zero coupon convertible bonds due 2015 ························································
0.64% unsecured bonds due 2016 ··································································
0.30%–0.86% unsecured bonds due 2017 (*1) ···············································
Long-term bank loans due through 2074, with weighted-average interest rate of 1.230%
for the year ended March 31, 2014, and of 1.213% for the year ended March 31, 2013 ···Less current portion of long-term debt ·····························································
Total ············································································································

2014
¥
3,000
[3,000]10,00020,000
6,000
4,000
2,000
14,895[14,895]
1,000
4,147
[1,315]
226,760(68,965)¥ 222,837[19,210]

Thousands ofU.S. dollars (Note 1)

1,000
4,424
[1,277]

2014
29,149[29,149]
97,163
194,326
58,29838,865
19,433
144,724[144,724]
9,716
40,293[12,777]

208,574(44,944)¥ 226,954[1,277]2,203,265(670,084)$2,165,148[186,650]

¥

2013
3,000

$

10,00020,000
6,000
4,000
—
14,900(*1) [1,315] is the amount of current portion of bonds.
(*1) This is total amount of the bonds Goodman Co., Ltd. issued.
In September 2009, the Company issued ¥3,000 million (US$29,149 thousand) of 1.37% privately-placed bonds due 2014.
In March 2008, the Company issued ¥10,000 million (US$97,163 thousand) of 2.04% unsecured bonds due 2018.
In March 2011, the Company issued ¥20,000 million (US$194,326 thousand) of 0.877% unsecured bonds due 2016.
In March 2013, the Company issued ¥6,000 million (US$58,298 thousand) of 0.83% unsecured bonds due 2016.
In March 2013, the Company issued ¥4,000 million (US$38,865 thousand) of 1.09% unsecured bonds due 2018.
In March 2014, the Company issued ¥2,000 million (US$19,433 thousand) of 0.61% unsecured bonds due 2019.
In March 2010, the Company issued ¥15,000 million (US$144,724 thousand) of zero coupon convertible bonds due 2015.
In April 2011, Tohoku Nipro Pharmaceutical Corporation issued ¥1,000 million (US$9,716 thousand) of 0.64% privately-placed bonds due 2016.
From November 2010 to February 2014, Goodman Co., Ltd. issued ¥4,424 million (US$40,293 thousand) of 0.30%–0.86% unsecure bonds due from 2014 to 2019.

The aggregate annual maturities of long-term debt outstanding at March 31, 2014 are as follows:
Millions of yen

2014 ··············································································································
2015 ··············································································································
2016 ··············································································································
2017 and thereafter ·······················································································
Total ··········································································································

¥

¥

2014
68,965
72,13862,34988,350291,802

Thousands of U.S. dollars (Note 1)$

2014
670,084
700,913605,801
858,434$2,835,232

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

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

39 Nipro Corporation Annual Report 2014

(1) Defined Benefit Plans(a) The reconciliation of beginning and ending balances of the benefit obligation (excluding the defined benefit plansapplied based on the simplified method) are as follows.
Millions of yen

Obligation at April 1 ·······················································································
Service cost ································································································
Interest cost ·······························································································
Actuarial (gain) loss ····················································································
Bebefit payments ························································································
Prior service cost ·························································································
Other (foreign currency translation adjustments, etc.) ·································
Obligation at March 31 ··················································································

¥

¥

2014
9,870
676
152
381
(662)
381
205
11,003Thousands of U.S. dollars (Note 1)

$

$

2014
95,900
6,568
1,477
3,702
(6,432)
3,702
1,991
106,908(b) The reconciliation of beginning and ending balances of the fair value of the plan assets (excluding the defined benefit
plans applied based on the simplified method) are as follows.
Millions of yen

Fair value of plan assets at April 1 ···································································
Expected return on plan assets ···································································
Actuarial (gain) loss ····················································································
Company contribution ················································································
Benefit payments ························································································
Other (foreign currency translation adjustments, etc.) ·································
Fair value of plan assets at March 31 ······························································

¥

¥

2014
6,923
122
389
506
(432)
69
7,577

Thousands of U.S. dollars (Note 1)

$

$

2014
67,266
1,185
3,780
4,916
(4,197)670
73,620(c) The reconciliation of beginning and ending balances of liabilities for retirement benefit applied based on thesimplified method are as follows.
Millions of yen

Liabilities for retirement benefit at April 1 ·······················································
Begenning balance of new consolidated subsidiary ·····································
Retirement benefit cost ··············································································
Retirement payments ··················································································
Contribution for the plan ············································································
Other (foreign currency translation adjustments, etc.) ·································
Liabilities for retirement benefit at March 31 ···················································

¥

¥

2014
417
62
165
(43)
(71)
(11)
519

Thousands of U.S. dollars (Note 1)

$

$

2014
4,052
602
1,603
(418)
(690)
(106)
5,043

(d) The reconciliation of ending balance of the benefit obligation and the fair value of the plan assets, and liabilities andassets for retirement benefit are as follows.
Millions of yen

Benefit obligation on funded scheme ······························································
Plan assets ······································································································¥¥

Benefit obligations on non-funded scheme ·····················································Net assets (liabilities) on the consolidated balance sheet ·································Net defined benefit liability ·············································································Net defined benefit asset ················································································Net assets (liabilities) on the consolidated balance sheet ·································

¥

¥

2014
11,223(8,135)
3,088
857
3,945
4,043
(98)
3,945

Thousands of U.S. dollars (Note 1)

$
$
$

$

2014
109,046(79,042)
30,004
8,327
38,331
39,283(952)
38,331(*) Including the defined benefit plans applied based on the simplified method(e) The breakdown of net pension and severance costs are as follows.
Millions of yen

Service cost ····································································································
Interest cost ···································································································
Expected return on plan assets ·······································································
Amortization of actuarial ················································································
Amortization of past service obligation ···························································
Retirement benefit cost based on the simplified method ·································
Other ·············································································································
Total ··············································································································

¥

¥

2014
676
152
(122)
259
91
165
98
1,319

Thousands of U.S. dollars (Note 1)

$

$

2014
6,568
1,477
(1,185)
2,517
884
1,603
952
12,816

Nipro Corporation Annual Report 2014 40

(f) Remeasurements of defined benefit plans
The breakdown of the items recorded in adjustments to defined benefit plans are as follows.
Millions of yen

Unrecognized prior service cost ······································································
Unrecognized actuarial (gain) loss ··································································
Total ··············································································································

¥
¥

2014
274
271
545

Thousands of U.S. dollars (Note 1)

$
$

2014
2,662
2,633
5,295

(g) Items concerning the pension assets
1) The breakdown of the pension assets
The ratio of the plan assets are as follows.
2014
35%
27%
0%
34%
4%
100%

Bonds ············································································································
Equities ··········································································································Cash and deposits ··························································································
General account ·····························································································
Others ············································································································
Total ··············································································································(*) Including the defined benefit plans applied based on the simplified method

2) Setting of the long-term expectated rate of return
The long-term expected rate of return is to be determined considering the current and future allocation of plan assets, and the current andexpected long-term rate of return from the diverse assets composing the plan assets.

(h) Calculation basis of actuarial methods
The main calculation basis of actuarial methods at the end of the period is as follows.
Discount rate ··································································································
Expected long-term rate of return ···································································

2014
Primarily 1.2%
Primarily 1.5%

(2) Defined Contribution Retirement Plans
The amounts of necessary contributions to defined contribution retirement plans within the company and consolidated subsidiaries were ¥326
millions (US$3,168 thousand).
The following table sets forth the project benefit obligation, plan assets and funded status of the Company and its consolidated subsidiaries at
March 31, 2013.
Millions of yen

1) Projected benefit obligation ·······································································
2) Fair value of plan assets ·············································································
3) Projected benefit obligation in excess of plan assets 1)+2) ·························
4) Unrecognized actuarial (gain) loss ·····························································
5) Unrecognized past service obligation ·························································
6) Total 3)+4)+5) ························································································
7) Prepaid pension cost ·················································································
8) Accrued pension and severance liabilities 6)–7) ·········································

¥

¥

2013
(10,739)7,375(3,364)532(6)(2,838)17(2,855)The breakdown of net pension and severance costs for the years ended March 31, 2013 was as follows:
Millions of yen

2013
Service cost ····································································································
Interest cost ···································································································
Expected return on plan assets ········································································
Amortization of actuarial gain ········································································
Amortization of past service obligation ···························································
Other ·············································································································Net pension and severance costs ····································································

41 Nipro Corporation Annual Report 2014

¥

¥

665
174
(110)
358
(3)
419
1,503

The assumptions used in the accounting for the above benefit plans were as follows:
2013
Primarily 1.2%
Primarily 1.5%
Primarily 5 years
Primarily 5 years

Discount rate ··································································································
Expected rate of return on plan assets ····························································
Amortization period of past service obligation ················································
Amortization period of actuarial differences ····················································

12. Commitments and Contingent Liabilities
The Company and its consolidated subsidiaries had the following commitments and contingent liabilities:
Millions of yen

Thousands of U.S. dollars (Note 1)

2014¥

Export drafts discounted ·················································································
Trade notes receivable discounted ··································································
Total ··········································································································

2013
—
36
36

¥

¥
¥

$

37
—
37

$

2014
—
350
350

13. Stock Options
The stock options outstanding as of March 31, 2014 and 2013 were as follows:
Consolidated subsidiary (Goodman Co., Ltd.)
2014

Persons granted
Class andnumber of share
Grant date
Exercise period
Terms for vestingSpecified term ofyears before vesting

November 25, 2005
at board of directors’ meeting
Directors of Goodman Co., Ltd: 4
Employees of Goodman Co., Ltd: 348
Others: 4
878,500 shares ofcommon stock of Goodman
December 5, 2005
From December 6, 2005 toAugust 31, 2015—

January 6, 2006
at board of directors’ meeting

April 14, 2006
at board of directors’ meeting

April 27, 2006
at board of directors’ meeting

Employees of Goodman Co., Ltd: 2

Employees of Goodman Co., Ltd: 16

Employees of Goodman Co., Ltd: 66,500 shares ofcommon stock of Goodman
January 6, 2006
From September 23, 2007 to
August 31, 2015—

31,000 shares ofcommon stock of Goodman
April 14, 2006
From September 23, 2007 to
August 31, 2015—

7,000 shares ofcommon stock of Goodman
April 28, 2006
From April 28, 2006 to
August 31, 2015
—

—

—

—

—

January 6, 2006
at board of directors’ meeting

April 14, 2006
at board of directors’ meeting

April 27, 2006
at board of directors’ meeting

Employees of Goodman Co., Ltd: 2

Employees of Goodman Co., Ltd: 16

Employees of Goodman Co., Ltd: 66,500 shares ofcommon stock of Goodman
January 6, 2006
From September 23, 2007 to
August 31, 2015—

31,000 shares ofcommon stock of Goodman
April 14, 2006
From September 23, 2007 to
August 31, 2015—

7,000 shares ofcommon stock of Goodman
April 28, 2006
From April 28, 2006 to
August 31, 2015—

2013

Persons granted
Class andnumber of share
Grant date
Exercise period
Terms for vestingSpecified term ofyears before vesting

November 25, 2005
at board of directors’ meeting
Directors of Goodman Co., Ltd: 4
Employees of Goodman Co., Ltd: 348
Others: 4
878,500 shares ofcommon stock of Goodman
December 5, 2005
From December 6, 2005 toAugust 31, 2015
—
—

—

—

—

In addition to the aforementioned information of the stock options outstanding, the stock option activity is as follows:
Consolidated subsidiary (Goodman Co., Ltd.)
November 25, 2005
at board of directors’ meeting
Non-vested shares
At the beginning of the year
Granted during the year
Forfeited and expired during the year
Vested during the year
At the end of the year
Vested shares
At the beginning of the year
Vested during the year
Exercised during the year
Forfeited and expired during the year
Unexercised at the end of the year

2014
January 6, 2006
April 14, 2006
at board of directors’ meeting at board of directors’ meeting

April 27, 2006
at board of directors’ meeting

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

709,000——
456,000
253,000

6,500
—
—
6,500
—

28,500——28,500
—

2,500
—
—
500
2,000
Nipro Corporation Annual Report 2014 42

November 25, 2005
at board of directors’ meeting
Non-vested shares
At the beginning of the year
Granted during the year
Forfeited and expired during the year
Vested during the year
At the end of the year
Vested shares
At the beginning of the year
Vested during the year
Exercised during the year
Forfeited and expired during the year
Unexercised at the end of the year

2013
January 6, 2006
April 14, 2006
at board of directors’ meeting at board of directors’ meeting

April 27, 2006
at board of directors’ meeting

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

709,000———
709,000

6,500
—
—
—
6,500

28,500———28,500

2,500
—
—
—
2,500

The number of stock options were converted into that of common stocks.

Yen
2014

Exercise price
Average stock price at exercise
Fair value price at the grant date

Exercise price
Average stock price at exercise
Fair value price at the grant dateNovember 25, 2005
at board of directors’ meeting¥ 2,169——

January 6, 2006
at board of directors’ meeting¥ 2,410——

April 14, 2006
at board of directors’ meeting¥ 2,490——

April 27, 2006
at board of directors’ meeting¥ 2,415——

November 25, 2005
at board of directors’ meeting
$
21
—
—

U.S. dollars (Note 1)
2014
January 6, 2006
April 14, 2006
at board of directors’ meeting at board of directors’ meeting
$
23
$
24
—
—
—
—

April 27, 2006
at board of directors’ meeting
$
23
—
—

Yen
2013

Exercise price
Average stock price at exercise
Fair value price at the grant dateNovember 25, 2005
at board of directors’ meeting¥ 2,169——

January 6, 2006
at board of directors’ meeting¥ 2,410——

April 14, 2006
at board of directors’ meeting¥ 2,490——

April 27, 2006
at board of directors’ meeting¥ 2,415——

14. Business Combination(1) Outline of the business combination
1) Name of the acquired company
Nichihos Co., Ltd. and other 10 companies
2) Business of the acquired company
Management of Dispensing Pharmacies and Sales of
Pharmaceutical Products
3) Date of the business combination
June 14, 2013
4) Legal form of the business combination
Cash acquisition of shares
5) Ratio of voting rights acquired
100.0%(2) Period for which the operating results of theacquired company in the consolidated
statements of income
From April 1, 2013 to March 31, 2014

43 Nipro Corporation Annual Report 2014

(3) Acquisition cost
Millions of yen

Value of acquisition ······················
Others expenses ···························
Total ············································

¥
¥

6,157
—
6,157

Thousands of U.S. dollars(Note 1)$$

59,823—59,823(4) Amount, cause, method and period ofamortization of goodwill
1) Amount of goodwill¥7,044 million (US$68,442 thousand)2) Cause of goodwill
Anticipated future profitability3) Method and period of amortization of goodwill
Straight-line method over the period the Company will benefit
from its use

(5) Amounts of assets acquired and liabilities
assumed on the day of the business combination
Millions of yen

Current assets ······························
Fixed assets ··································
Total assets ··································
Current liabilities ··························
Fixed liabilities ······························
Total liabilities ······························

¥
¥
¥
¥

Thousands of U.S. dollars(Note 1)

2,435
938
3,373
2,723
1,538
4,261

$
$
$
$

23,6599,114
32,773
26,457
14,944
41,401

15. Net Assets
The significant provisions in the Corporate Law of Japan (the“Corporate Law”) that influence financial and accounting matters
are summarized below:(a) Dividends
Under the Corporate Law, companies can pay dividends at any time
during the fiscal year in addition to the year-end dividend upon
resolution at the shareholders meeting. For companies that meetcertain criteria such as (1) having the board of directors, (2) having
independent auditors, (3) having the board of corporate auditors,and (4) the service period of the directors is prescribed as one year
rather than the normal term of two years by its articles ofincorporation, the board of directors may declare dividends (except
for dividends in kind) if the company has prescribed so in its articles
of incorporation. The Company’s present system meets the first threecriteria but the two-year service period of the directors does notmeet the fourth criterion.
Interim dividends may also be paid once a year by the resolutionof the board of directors if the articles of incorporation of thecompany stipulate so. The Company’s articles of incorporation
contain such a stipulation, and it pays interim dividend
semi-annually by the resolution of the Board of Directors.
The Corporate Law provides certain limitations on the amounts
available for dividends or the purchase of treasury stock.

(b) Increases/Decreases and Transfer of Common Stock,
Reserve and Surplus
The Corporate Law requires that an amount equal to 10% of
dividends must be appropriated as legal reserve (a component ofretained earnings) or as additional paid-in capital (a component of
capital surplus) depending on the equity account charged upon thepayment of such dividends until the total of aggregate amount oflegal reserve and additional paid-in capital equals 25% of thecommon stock.
Under the Corporate Law, the total amount of additional paid-in
capital and legal reserve may be reversed without limitation.
The Corporate Law also provides that common stock, legal
reserve, additional paid-in capital, other capital surplus and retained
earnings can be transferred among the accounts under certain
conditions by the resolution of the shareholders’ meeting.
The Company’s legal reserve, which is included in retained
earnings, amounted to ¥2,179 million (US$21,172 thousand) as ofMarch 31, 2014, and its additional paid-in capital, which is included
in capital surplus, amounted to ¥635 million (US$ 6,170 thousand)as of March 31, 2014.

16. Segment Reporting
Outline of Reportable Operating Segments

Pharmaceutical-Related

Applied ASBJ Statement No.17 “The Revised Accounting Standard
for Disclosures of Segments of an Enterprise and RelatedInformation”, the reportable operating segments are components ofan entity for which separate financial information is available andsuch information is evaluated regularly by the board of directors indeciding how to allocate management resources and in assessing
performance.
The Company currently operates its business on a stand-alone
basis with the divisional organization and evaluates the performanceof sales and manufacture of each division regardless of theirproducts. Accordingly, the Company has three reportable operating
business segments according to the divisions (Medical-Related
business, Pharmaceutical-Related business and Grass-Related
business), which are divided mainly by their products.

Pharmaceutical division sells containers for combination products(injectable kit products) and pharmaceutical products consigned byother pharmaceutical companies. Domestic subsidiaries sell andmanufacture injectable drugs, oral drugs and combination products.

Medical-RelatedDomestic division sells injection and infusion products, artificialorgan products, highly functional products, dialysis products anddiabetes products. In the Global business division, head office plays
the center role and place overseas sales and manufacturing base for
medical equipment and glass products for medical purpose andsales injection and infusion products, artificial organ products,
diabetic products and glass for vials and ampoules.

Glass-Related
Glass-Related segment sells tube glass for pharmaceuticals, vials andampoules, and grass material products for thermos bottles andlighting.
(1) Effective from the first quarter ended June 30, 2013, thepharmaceutical product sales unit of Nipro Pharma Corporation has
been integrated into the Company’s Domestic Division in order toenhance the Company’s management capability through close
coordination between the three divisions: the Medical Devices
Division, the Pharmaceutical Products Division, and the Glass andMaterials Division. In accordance with this change, the sales unit,
which had previously been categorized into thePharmaceutical-Related segment, is reclassified to the Medical-Related
segment.

Nipro Corporation Annual Report 2014 44

The segment information for the period ended March 31, 2013
under the reclassification is not disclosed, because it is practicallydifficult to trace accurate amounts of cost of sales and selling,
general and administrative expenses. In addition, the segment
information for the current period under review before thereclassification is not disclosed due to the aforementioned reason.
Sales to the external customers for the period ended March 31,
2013, if prepared based on the segments before the reclassification,
would have been ¥191,074 million (US$1,857 thousand) for the
Medical-Related segment and ¥45,109 million (US$438 thousand)for the Pharmaceutical-Related segment.

(2) Effective from the first quarter ended June 30, 2013, Chengdu
Pingyuan Nipro Pharmaceutical Packaging Co., Ltd., Jilin Nipro
Jiaheng Pharmaceutical Packing Co., Ltd. and Anyang Nipro Changda
Pharmaceutical Packaging Co., Ltd., which had previously been
categorized into the Glass-Related segment, are reclassified to theMedical-Related segment, as part of re-evaluating international
management strategy.
The segment information for the period ended March 31, 2013 isprepared based on the reportable segment after the reclassification.

Business segment information for the years ended March 31, 2014 and 2013 was as follows:
Millions of yen

2014
MedicalRelated

Net sales:
Outside ································ ¥ 244,197
Intersegment ························
1,400
Total ····································
245,597
Operating income ························
17,696
Identifiable assets ························· ¥ 368,330
Other items
Depreciation and amortization ····· ¥ 15,204
Amortization of goodwill ·············
4,824
Capital expenditures ·····················
19,617

Reportable Segment
GlassPharmaceuticalRelated
Related

¥51,508
7,511
59,0198,013¥ 137,193

¥

¥

¥

8,777
3
10,647

¥

4,777
575
5,352
557
7,561
87
—
89

Other
(*1)

Total

¥ 300,482
9,486
309,968
26,266¥ 513,084¥¥¥

24,0684,827
30,353

¥

Total

271
—
271
216
4,497
46
—
—

Adjustment(*2)

Consolidated
financialstatements¥ 300,753
9,486
310,239
26,482¥ 517,581¥— ¥ 300,753(9,486)—(9,486)
300,753(14,192)
12,290¥ 102,074 ¥ 619,655¥

24,114
4,827
30,353¥

Total

Adjustment
(*2)

1,037
—
4,740

¥

25,151
4,827
35,093Thousands of U.S. dollars (Note 1)

2014
MedicalRelated

Net sales:
Outside ································ $2,372,688
Intersegment ························
13,603
Total ···································· 2,386,291
Operating income ························
171,939
Identifiable assets ························· $3,578,799
Other items
Depreciation and amortization ····· $ 147,726
Amortization of goodwill ·············
46,871
Capital expenditures ·····················
190,604

Reportable Segment
GlassPharmaceuticalRelated
Related$ 500,466
72,979573,445
77,857$1,333,006

$

$

$

85,28029
103,449

$

Other
(*1)

Total

46,415
5,587
52,002
5,412
73,465$2,919,569
92,1693,011,738
255,208$4,985,270

$

845
—
865

$ 233,851
46,900294,918$$

Consolidated
financialstatements

2,633
—
2,633
2,099
43,694$2,922,202
92,1693,014,371
257,307$5,028,964$— $2,922,202(92,169)—(92,169) 2,922,202(137,894)
119,413$ 991,780 $6,020,744

447
—
—

$ 234,298
46,900294,918$

10,076—46,055$ 244,374
46,900340,973

Total

Adjustment(*2)

Consolidated
financialstatements

241,0218,720
249,741
19,098449,214¥

Millions of yen

2013
MedicalRelated

Net sales:
Outside ································ ¥Intersegment ························
Total ····································
Operating income ························
Identifiable assets ························· ¥Other items
Depreciation and amortization ····· ¥Amortization of goodwill ·············
Capital expenditures ·····················

Reportable Segment
GlassPharmaceuticalRelated
Related169,971
1,277
171,248
14,287
304,753¥

12,085
2,835
26,365¥¥

66,212
6,907
73,1193,988
132,829

¥

¥

4,603
491
5,094
601
7,090

8,191 ¥
(1)
10,340

78
—
10

Other
(*1)

Total

¥ 240,786
8,675
249,461
18,876¥ 444,672¥¥¥

20,3542,834
36,715

¥

235
45
280
222
4,542
49
—
—

¥

¥
¥

20,4032,834
36,715¥¥— ¥(8,720)(8,720)(7,727)130,088 ¥

241,021—241,021
11,371
579,302

807
—
1,282

21,2102,834
37,997¥(*1) “Other” is the business segment which is not included in the reportable segment and consists of real estate income and sales by headquarters.
(*2) Adjustment is as follows:• Adjustments for the operating income ended March 31, 2014 and 2013 include ¥(2,483) million (US$(24,126) thousand) and ¥(44) million of elimination of inter-segment
transaction and ¥(11,709) million (US$(113,768) thousand) and ¥(7,683) million of corporate cost, respectively. Corporate cost consists primarily of sales, general andadministrative expenses and research and development cost which do not belong to the reportable segment.
• Adjustments for Identifiable assets ended March 31, 2014 and 2013 include ¥(65,201) million (US$(633,511) thousand) and ¥(51,050) million of elimination of inter-segment
transaction and ¥167,276 million (US$1,625,301 thousand) and ¥181,138 million of corporate assets, respectively. Corporate assets consisted primarily of cash and deposit,
investment securities, assets for development and assets for management division of head office which do not belong to the reportable segment.
• Adjustments for depreciation and amortization ended March 31, 2014 and 2013 are for corporate assets. Depreciation and amortization and Capital expenditures include
long-term prepaid expenses.
• Adjustment for capital expenditures is increase in corporate assets.

45 Nipro Corporation Annual Report 2014

Loss on impairment of fixed assets and Unamortized balance of goodwill by business segments were as follows:
Millions of yen

Millions of yen

2014
Reportable Segment
Medical- Pharmaceutical- GlassRelated
RelatedRelatedLoss on impairment of
fixed assets ·················· ¥2 ¥Unamortized balance of
goodwill ······················ 28,477

2013
Other

Total

— ¥

— ¥

17

—

2 ¥

Total

— ¥

28,494

Reportable Segment
Medical- Pharmaceutical- GlassRelated
RelatedRelated2¥

28,494—

2 ¥
22,732

Other

Total

— ¥

— ¥

9

—

2 ¥

Total

— ¥

22,741

2—

22,741Thousands of U.S. dollars (Note 1)

2014
Reportable Segment
Medical- Pharmaceutical- GlassRelated
RelatedRelatedLoss on impairment of
fixed assets ·················· $19 $Unamortized balance of
goodwill ······················ 276,691

Other

Total

— $

— $

165

0

19 $

276,856

Total

— $
—

19

276,856

Net sales and Property, plant and equipment for each area were as follows:
Millions of yen

Millions of yen

2014
Japan

Net sales ·························· ¥ 174,862 ¥Property, plant andequipment ···················
103,368

America

Europe

Asia

Total

Japan

56,887 ¥40,434 ¥28,570 ¥ 300,753

16,306

11,10460,8162013
EuropeAmerica

Asia

Total

¥ 138,962 ¥

46,311 ¥32,372 ¥23,376 ¥ 241,021

102,527

12,1997,870

52,107

191,594

174,703

Thousands of U.S. dollars (Note 1)

2014
Japan

America

Europe

Asia

Total

Net sales ·························· $1,699,010 $ 552,730 $ 392,868 $ 277,594 $2,922,202
Property, plant andequipment ··················· 1,004,352
158,434
107,890590,906 1,861,582

17. Selling, General and Administrative Expenses
Significant components of selling, general and administrative expenses for the years ended March 31, 2014 and 2013 were as follows:
Millions of yen

Salaries ···········································································································
Freight charges ·······························································································

2014¥ 17,795
6,527

Thousands of U.S. dollars (Note 1)

2013¥ 13,192
5,706

2014
$ 172,901
63,41818. Research and Development Expenses
Research and development expenses for the years ended March 31, 2014 and 2013 were ¥7,891 million (US$76,671 thousand) and ¥6,464
million, respectively.

19. Supplemental Disclosures of Cash Flow Information
Supplemental information related to the Consolidated Statements of Cash Flows was as follows:
Millions of yen

2014
Cash paid during the year for:
Interest ·······································································································
Income tax ·································································································

¥

3,908
7,501

Thousands of U.S. dollars (Note 1)

2014

2013
¥

3,439
6,288

$

37,971
72,882

Nipro Corporation Annual Report 2014 46

Report of Independent Auditors

47 Nipro Corporation Annual Report 2014

Corporate Information (As of March 31, 2014)

Principal Shareholders

Date of Establishment
July 8, 1954
Head Office
3-9-3 Honjo-nishi, Kita-ku, Osaka 531-8510, Japan
Telephone: +81-6-6372-2331
Facsimile : +81-6-6375-0669
URL: http://www.nipro.co.jp/english/
Tokyo Office
4-3-4 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan
Telephone: +81-3-5684-5611
Facsimile : +81-3-5684-5610
Number of Employees
Parent Company ································································
Consolidated subsidiaries ···················································
Total ·················································································

Common Stock
Authorized
IssuedOutstanding
Number of Shareholders

2,831
18,995
21,826

Nippon Electric Glass Co., Ltd. ··················
Japan Trustee Services Bank, Ltd. ··············
Resona Bank Limited ································
Trust & Custody Services Bank, Ltd. ···········
Kazumi Sano ············································BBH Boston GMO International
Intrinsic Value. ·····································
Mizuho Bank, Ltd. ····································The Master Trust Bank of Japan, Ltd. ········
Nipro employees’ stock ownershipassociations ·········································
Mitsubishi Tanabe Pharma Corporation ····
Total ························································

Number of
Shares Held(in thousands)

Percentage ofTotal Sharesin Issue (%)

25,718
7,601
5,360
3,702
1,910

15.00
4.43
3.13
2.16
1.11

1,869
1,565
1,471

1.09
0.91
0.86

1,360
1,166
51,725

0.79
0.68
30.17

Stock Price Range(Tokyo Stock Exchange)
400,000,000 shares
171,459,479 shares
151,916,006 shares
67,282

(Yen)
1,600
1,400
1,200

Stock Listings
Tokyo Stock Exchange
Ticker Code: 8086

1,000
800

Transfer Agent
Mizuho Trust & Banking Co., Ltd., Head Office
Stock Transfer Agency Dpt.
1-2-1 Yaesu, Chuo-ku, Tokyo 103-8670, Japan

600
400

12

2012

3

6

9

12

2013

3

6

9

12

2014

3

Major Subsidiaries (As of June 30, 2014)
Area
Domestic

CountryJapan

OverseaThailand
China

Singapore
India

BangladeshIndonesia
UAE
BrazilU.S.A.

Belgium
FranceGermany
Switzerland

Name
Nipro Medical Industries Co., Ltd.
Goodman Co., Ltd.
Nipro Pharma Corporation
Zensei Pharmaceutical Industries Co., Ltd.
Nichihos Co., Ltd.
Cell Science & Technology Institute, Inc.
Nipro(Thailand)Corporation Limited
Nipro Sales (Thailand) Co., Ltd.
Nipro(Shanghai)Co., Ltd.
Nipro Trading (Shanghai) Co., Ltd.
Chengdu Pingyuan Nipro Pharmaceutical Packaging Co., Ltd.
Jilin Nipro Jiaheng Pharmaceutical Packaging Co., Ltd.
Anyang Nipro Changda Pharmaceutical Packaging Co., Ltd.
Nipro Medical (Hefei) Co., Ltd.
Shanghai Nissho Vacuum Flask Refill Co., Ltd.
Nipro Asia Pte Ltd.
Nipro India Corporation Pvt. Ltd.
Nipro Glass India Pvt. Ltd.
Nipro Tube Glass Pvt. Ltd.
Nipro JMI Company Ltd.
Nipro JMI Pharma Ltd.
P.T. Nipro Indonesia Jaya
Nipro Middle East Free Zone Establishment
Nipro Medical Ltda.
Nipro Medical Corporation
Nipro Diagnostics, Inc.
Nipro Glass Americas Corporation
Nipro Europe N.V.
Nipro Glass Belgium N.V.
Nipro Glass France S.A.S.
Nipro Glass Germany AG
Nipro Sterile Glass Germany AG
Nipro Pharma Glass AG

Principal business
Manufacturing and Marketing of medical devices
Manufacturing and Marketing of medical devices
Manufacturing and Marketing of pharmaceuticals
Manufacturing and Marketing of pharmaceuticals
Management of dispensing pharmacies and Marketing of pharmaceutical products
Development and Manufacture of cell culture fluid
Manufacturing and Marketing of medical devices
Marketing of medical devices
Manufacturing and Marketing of medical devices
Marketing of medical devices
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical devices
Marketing of glass products
Marketing of medical devices
Manufacturing and Marketing of medical devices
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical devices
Manufacturing and Marketing of pharmaceuticals
Manufacturing and Marketing of medical devices and medical glass products
Marketing of medical devices
Manufacturing and Marketing of medical devices
Marketing of medical devices
Manufacturing and Marketing of diabetes products
Manufacturing and Marketing of medical glass products
Marketing of medical devices
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Business Management

Nipro Corporation Annual Report 2014 48

NIPRO CORPORATION
3-9-3 Honjo-nishi, Kita-ku, Osaka 531-8510, Japan
Telephone: +81-6-6372-2331
Facsimile : +81-6-6375-0669
http://www.nipro.co.jp/en