Annual Report 2021
Year Ended March 31, 2021

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

01

Contents

01 Contents

17 Management Foundation

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17 Research and Development Activities

02 About NIPRO
02 Businesses
03 Financial Highlights

04 Management Message

20 Status of Corporate Governance23 B oard of Directors andAudit & Supervisory Board Members

25 Financial/Data Section

07 A Message from the CFO

30 Ten-Year Summary
32 Consolidated Balance Sheets

08 A iming to Achieve Consolidated Sales of¥1 Trillion in the FYE 2031.3
10 Approaches to SDGs

33 Consolidated Statements of Income
33 C
 onsolidated Statements ofComprehensive Income

11 Medical-Related Business
13 Pharmaceutical-Related Business
15 PharmaPackaging BusinessMedium-termManagement Plan

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website34 C
 onsolidated Statements of Changes
in Equity
35 Consolidated Statements of Cash Flows
36 Notes to Consolidated Financial Statements
53 Corporate Information

11 Review of OperationsManagement
Message

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25 Financial Review

08 Management Plan

About NIPRO

22 Outside Directors’ Messages

04 President’s Message

Outline of the Medium-TermContents

Disclaimer
This report contains forward-looking statements regarding businessindices, strategies, and performance representing the expectations andjudgments of the management, based on information available to theCompany and publishable at the time this report was prepared. Whenreading this report, please understand that forward-looking statements
involve potential risks and uncertainties; actual future business performanceand forecasts 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.
In this report, fiscal 2021 represents the year ended March 31, 2021.

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

02

● Businesses● Financial Highlights

About NIPRO

Businesses
We Meet the Needs ofMedical Professionals andPatients through Our Three Businesses
Sales ratio by business9%

PharmaPackaging
Business

76%

Medical-Related
Business

Fiscal 2021

Medical-Related
Business

Renal Products

Hospital Products

Vascular Products

Injectables

Orally Administered Drugs

External Preparations

Glass Converting

Glass Tubing

DevicesNipro engages globally in the development, manufacture,and sale of medical equipment for injection-infusion anddialysis treatment, and products related to diabetes
and cell cultures, as well as the sale of artificial organrelated products.

PharmaceuticalRelated BusinessOne of the world’s leading CDMO* companies, Nipro performs
contract manufacturing of orally administered drugs, injectables, and external preparations through its PharmaceuticalRelated business, and supplies products to pharmaceuticalcompanies in Japan and around the world.
* Contract Development and Manufacturing Organization

PharmaPackaging
Business

15%

PharmaceuticalRelated BusinessNet sales¥455,559

millionNipro’s PharmaPackaging business, a part of the company
since its founding, manufactures and sells glass products
and other comprehensive pharmaceutical packaging.
Currently, Nipro engages in this business globally from abase of 11 companies and 14 plants in 8 countries,
focused on Japan, China, Europe, and the U.S.

Contents

About NIPRO

Outline of theMedium-Term
Management Plan

Management
Message

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

03● Businesses● Financial Highlights

About NIPRO

Financial Highlights
Net sales¥455,559

millionNet sales increased by 2.9% from fiscal 2020 due
to favorable dialysis products and increased
demand for new COVID-19 related products.
(Millions of yen)359,699395,397

Net income attributable toowners of the parent

Operating income

455,559
426,399 442,516¥27,627

millionOperating income increased by 4.6% fromfiscal 2020 due to steady sales of dialyzers andcontrolled expenditure on travel expenses andsales promotion expenses.
(Millions of yen)

28,770¥14,209

R&D expenses

million

Net income attributable to owners of the parent
increased by 26,491 million yen from fiscal 2020,
mainly due to significant decrease in income
taxes-deferred.
(Millions of yen)

27,08823,827

26,42027,627

11,346

11,82914,20912,136¥18,652

R&D expenses increased by 2.5% from fiscal 2020
mainly due to development of new injectable andoral drugs in pharmaceutical-related business.
(Millions of yen)

2018

2019

2020

2021

Capital investment¥51,982
53,826

57,71856,276

2018

2019

2020

2021

Total assets/Equity ratio

Total
assets:millionCapital investment decreased by 20.3% from fiscal
2020 due to delay in expansion of dialyzer production
line in India caused by COVID-19.
(Millions of yen)

2017

57,86551,982¥854,396

millionTotal assets (Millions of yen)
Equity ratio (%)

20.9

2019

2020

2021

ROE:

9.2

19.1

17.9

%

Return on equity up to 9.2% due to increase in net
income attributable to owners of the parent.

7.3

7.0

6.8

2018

2019

18,204

18,652

2017

2020

2021

¥28.0

Nipro paid interim dividend of 10.50 yen per shareand year-end dividend of 17.50 yen per share. Nipro
paid ¥28.0 per share for the year.
(Yen)

176,408 183,485 171,830

18.8

16,526

Cash dividends per share

Net Assets (Millions of yen)
ROE (%)

826,447 845,821 831,865 854,396

22.1

2018

Net assets/Return on equity

Total assets increased by 2.7% from fiscal 2020and equity ratio stood at 18.8%.

752,8392017

16,113
11,517-12,2812017

million161,237 174,053
9.2

29.0

28.5

28.0

28.0

13.5

-7.9
2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

04● President’s Message● A Message from the CFOManagement Message

President’s Message
Results

Fulfilling NIPROʼs social
responsibility bymeeting user needs

Net sales

Total¥455,559 million

2.9% increase from fiscal 2020
Operating income

Yoshihiko Sano
President and Representative Director

Total
Achieved an increase in sales andprofits despite the impact of the
COVID-19 pandemic

construction of the new line at our India plant due to the lockdown,

In the fiscal year ending March 2021, net sales increased by 2.9%

while Nipro Pharma’s Kagamiishi Plant was hit by an earthquake

to 455,559 million yen and operating income by 4.6% to 27,627

off the coast of Fukushima Prefecture in February 2021. Thus,

million yen from the previous fiscal year, and net income attributableproduction was low, which led to a loss of opportunities.

to owners of the parent returned to profit of 14,209 million yen fromminus 12,281 million yen in the previous fiscal year.

Although demand for it was stable and strong compared with that
before the pandemic, we could not expand our manufacturing¥27,627 million

4.6% increase from fiscal 2020

facilities to respond to the increase in demand—we had to stop theOn the other hand, sales of consumables such as gloves, masks,
and gowns, vials and syringes for vaccines, and high-value-added

This year, the pandemic greatly affected our supply chain—pre-fillable syringes increased due to the pandemic’s impact.

manufacturing, purchasing, distribution, and sales—as well as

Increasing demand for home care also boosted the sales of Heart-

domestic and overseas business areas. Our main product, theMate 3, an implantable ventricular assist device that facilitates

dialyzer, is the major reason behind the smaller revenue growth.

home device management.

Net income attributable toowners of the parent

Total¥14,209 million¥26,491 million increase
from fiscal 2020

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

05

● President’s Message● A Message from the CFOManagement Message

President’s Message

Regarding profits, the operating profit rate increased following

division has begun handling vascular products from May 2021.

ending March 2027—in particular, we will invest about 36,000

the reduction in transportation and sales promotion expenses due

Thus, we will further promote the sales organization in the U.S. andmillion yen in our medical device plant in Vietnam and introduce

to travel restrictions. However, the increase in profits was not as

expand the lineup of products that have the potential to rank

manufacturing equipment from March 2023. The monthly production

large as expected at the beginning of this fiscal year. The increase inamong the top three worldwide.

capacity is expected to be 3 million units. We will respond to the

net income attributable to owners of the parent from the previous

Regarding regenerative medicine, we have been steadily

growth in global demand and secure an advantageous position in

fiscal year was a result of 29,892 million yen being recorded as

reducing costs to improve profitability after the National Healththe development of markets in Southeast Asia in the future. We plan

investment securities valuation loss in the previous fiscal year

Insurance drug price listing in 2019. We will promote automatization

to invest about 50,000 million yen in the Odate Plant, our main plant

and a significant decrease in income taxes and others due to theof the facilities of cell culture currently performed at Sapporo CPF,

in Japan, to increase the monthly production volume to 5.5–6

adoption of the consolidated tax payment system in the U.S.

and establish Tokyo CPF in this fiscal year to further enhance themillion units by the end of the fiscal year ending March 2026.

management company and reassessment of deferred tax assets.

facilities’ capacity.

In addition, we will make efforts to increase our production volume

We will increase the production and sales of other products,

in India and China. Thus, the global production volume is expected

including consumables such as gloves, masks, and gowns, as well

to exceed 12 million units per month, from the current 5.5 million

Increase in production of main
products, including dialyzers

as the Nipro syringe (low dead volume type), which yields six doses

units, in the fiscal year ending March 2027. For these facilities, wefrom a COVID-19 vaccine vial, and Nipro VA syringe (non-deadwill try to improve profitability significantly by thoroughly automating

volume type), which yields seven doses. Regarding drug products,

all manufacturing lines, including inspection equipment.

COVID-19 will continue to impact business in the future. Products

we will continuously strengthen our contract manufacturing,

Meanwhile, regarding the finances that enable these investment

and services across the medical industry have been affected by aincluding starting the formulation of the AstraZeneca COVID-19

activities, we will strengthen our ability to generate a cash flow by

decrease in medical practice, excluding those needed for fighting

vaccine “VaxzevriaTM Intramuscular Injection.”increasing product competitiveness and improving profitability.

COVID-19. However, the need for renal products such as dialyzers,
our forte, has not reduced because these are necessary forchronic ailments such as kidney disease. Therefore, increasing
dialyzer production will be our priority for the fiscal year ending
March 2022. Since our India plant was significantly affected by
the pandemic, we will expand dialyzer production at our China andVietnam plants, in addition to our Odate Plant in Japan.

Investment for medium- tolong-term business expansion
and financial discipline
Our goal is to become a corporate group with sales of 1 trillion yen

Regarding surgery-related products, we will further accelerate

in the fiscal year ending March 2031. To this end, we need to invest

the sale of vascular products in the U.S., which we have beenin equipment from the medium- to long-term perspective, in addition

focusing on since the previous fiscal year. Regarding the new

to pursuing short-term sales. For example, we plan to invest moreproduct NIRS-IVUS, marketing authorization has been obtained

than 100,000 million yen in Japan and overseas to increase thein the U.S., and the Nipro Medical Corporation’s North American

production of our main product, the dialyzer, by the fiscal year

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

06● President’s Message● A Message from the CFOManagement Message

President’s Message

In this fiscal year, ROE was 9.2% and the operating profit margingroup’s profitability. Nevertheless, I will not stop doing that, mainly

6.1%. In the medium-term management plan, we aim to increase

because of the user feedback I have received recently, particularly

corporate value by setting the average annual growth rate at 7.0%

in medical settings: “NIPRO is reliable” and “NIPRO is the one that

To become a corporate groupwith sales of 1 trillion yen

or higher and the net interest-bearing debt/EBITDA ratio at four

responds to our request.” I feel that users now understand theWe have set the long-term goal of achieving net sales of 1 trillion

times, in addition to ROE at 14.0% and the operating profit margin

difference between our company and others.

yen for the fiscal year ending March 2031. To fulfill this goal, we

Regarding social responsibility, we have been furthering theneed to achieve an average annual growth rate of 7.0% or higher.

dialysis center business, mainly in emerging countries. Until the

For this, it is not enough for us to simply ride a growth wave ofprevious fiscal year, we had 16 dialysis centers of our own; since

the market; we need to have the power to race ahead of otherMeeting user needs is NIPRO’ssocial responsibility

then, we have acquired more than 100 facilities. We plan tocompanies and expand our market share. I believe that meeting

increase this number. We will open 300 dialysis centers overall byuser needs and supplying products that society needs is the2025, as well as increase our own by 2030. Thus, our aim is tomost important factor here as well. As per the concept of “Sanpo

Having seen the spread of COVID-19, I am now more keenly

eliminate medical disparities, provide high-quality products andYoshi,” by pursuing the interests of our company, users, andaware of NIPRO’s social responsibility than ever, convinced thattreatment environments, and secure a product sales network insociety, we will be able to contribute to people’s safety, security,

we need to further promote management to meet user needs.

emerging countries.

and health as well as ensure long-term profits. I would appreciate

at 9.0% or higher, by the end of the fiscal year ending March 2025.

For example, we decided to manufacture approximately 100

Diversity in human resources is an absolute condition tomillion syringes for the COVID-19 vaccine at our Thailand plant infurther promote global operations. We assign local staff to theApril 2021. Such a large capital investment involves significant

managers of affiliated companies overseas. We also regularlyrisks, considering that we may be able to return to normalcy inprovide opportunities to these overseas managers to actively

a relatively short period of time. The same can be said about

exchange opinions with the staff and each other. This helps us

contract manufacturing of vaccines. However, it is our social

adopt the different ideas shared by our group companies.

responsibility as a medical device manufacturer to stably supply theRegarding environmental issues, domestic companies areproducts users need and contribute to people’s safety and security.

required to take further actions, including setting a government

While we need large upfront costs to fulfill our responsibility, I believe

target of carbon neutrality by 2050 and reducing greenhouse gasthat meeting user needs will increase social confidence in ouremissions by 46% by 2030—we set up a solar power generationcompany in the long term, helping us earn large profits in the future.

system at the Nipro Thailand Corporation in 2018 to promote the

To respond to user needs, we need to produce various kinds

use of renewable energy. We will continue to make efforts to reduceof products in small volumes, which has a negative impact on ourenvironmental loads and greenhouse gases.

your continued support in the future.

July 2021
President and Representative Director

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

07

● President’s Message● A Message from the CFOManagement Message

A Message from the CFO
We will improve ourfinancial constitution and carry out
continuous capital investment.

Takehito Yogo
Managing Director,
General Manager of Corporate
Planning Division

Progress in the medium-termbusiness plan
We are improving our financial constitution by setting our KPIs fromthe perspectives of "growth potential," "profitability," "financial health,""asset efficiency," and "investment efficiency" in the medium-term
management plan with the last fiscal year ending in March 2025.
First, regarding "growth potential," we set our mean annual sales
growth target at 7.0% or higher. The sales of both medical devices
and drugs decreased due to the COVID-19 pandemic in the first halfof this period. However, in the second half, they recovered to a level
higher than the previous period, with a 2.9% year-on-year increase.
Since sales of both medical devices and drugs, centered on new
products, are estimated to increase in the fiscal year ending March

2022, we expect an 8.6% increase in revenue from the current period.
Next, regarding "profitability," we aim to achieve an operating
profit margin of 9.0% or higher. The operating profit margin was
6.1% in the current period because of a reduction in sales, general,and administration expenses, such as sales promotion and travel
outlays. However, the operating profit margin in the fiscal year
ending March 2022 is expected to decrease to 5.6% due to asteep rise in transportation costs.
Regarding "financial health," we aim at between 4.0 and 4.9
times of the net interest-bearing debt/EBITDA ratio. In the current
period, the net interest-bearing debt increased by 7,800 million
yen from the previous period to 447,600 million yen, which is
associated with an increase in capital investment. In the fiscal year
ending March 2022, we will reduce our net interest-bearing debt
by improving working capital efficiency and cashing securities andidle assets in addition to growing our profits. The net interest-bearing
debt/EBITDA ratio has been showing a downward trend due to anincrease in EBITDA since the fiscal year ending March 2019, andthis ratio is expected to improve to 6.3 times in the fiscal year
ending March 2022.
Regarding "asset efficiency," we set our goal at ROE of 14.0% or
higher. The ROE substantially improved to 9.2% in the current period
because of a decrease in equity capital in the previous period, in
addition to a significant increase in net income in the current period
due to increased sales, decreased manufacturing costs, and asurplus in exchange profit and loss. In the year ending March 2022,
ROE is expected to be 8.9% as the net income of this period
increases by about 600 million yen compared to the current period.
Lastly, regarding "investment efficiency," we aim to turn positivein free cash flow. In the current period, free cash flow achieved aprofitability of 21,000 million yen due to liquidation of receivables,
use of lease, cashing of securities, and reduction of tax costs,
such as consolidated taxes. In the year ending March 2022, wewill continue to reduce investment cash flow by increasing leaseassets and selling securities. Thus, free cash flow is expected to
be a surplus of 12,400 million yen.

Status of capital investment
The amount of capital investment* in the current period was 51,982
million yen, a decrease of 20.3% from the previous period. The
major reason for the decrease in the investment amount is that the
expansion work of the dialyzer manufacturing line in India wassuspended due to the COVID-19 pandemic. Accordingly, the resultsof the Medical-Related business were 32,735 million yen in thecurrent period compared to the initial forecast of 35,300 million yen.
Since the impact of the COVID-19 pandemic seems likely tocontinue in India in the year ending March 2022, we expect 15,200
million yen in the Medical-Related business, decreasing by 53.6%
compared to the current period. In the Pharmaceutical-Related
business, we plan an increase of 49.8% from the current period to
19,900 million yen by the addition of the syringe line of Nipro Pharma.
In the PharmaPackaging business, we expect an increase of 214.1%
from the current period to 12,300 million yen due to the expansionof facilities in Germany and France and the regular repair of kilns.
As a result, total capital investment is expected to decrease by
4.8% from the current period to 49,500 million yen.
* Capital investment based on acceptance inspection.

Dividend policy
We set the total amount of consolidated current net income at 75%
and nonconsolidated current net income at 25% used as the basefor dividends. Based on this policy, we paid an interim dividend of
10.50 yen and a year-end dividend of 17.50 yen in this period.
Regarding the dividends for the fiscal year ending March 2022,
we will continue to strengthen our financial constitution and return
profits in consideration of stable dividends while continuing withthe previous dividend policy. We plan to pay an annual dividend of
29 yen per share.

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

08● Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3● Approaches to SDGs

Outline of the Medium-Term Management Plan

Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3
Management Policy
Keeping up with the turbulent times, we will continue to respond to user needs, aim to become the world's
top manufacturer in terms of product competitiveness and market share, and promote local production for
local consumption globally.
Priority Tasks
1 Protecting a corporate culture that provides opportunities to motivated people
2 Making decisions from the end-user's perspective is our top priority
3 Upholding the Sanpoyoshi (Win-Win-Win for users, society, and the company) principle
4 Sharing information about each step of the Plan-Do-Check-Act (PDCA) process with all employees sothat they can manage the PDCA cycle with a sense of ownership
5 Becoming a company wherein the organization managers recognize the gap between theory and reality
and can lead their staff to understand it

KPIs for FYE 2025.3
Net sales

Average annual growth ofOperating income Average annual growth of 7.0+%

9.0+%

Operating margin ratio
Net Sales/Operating Margin Ratio

1 Challenge of becoming the No. 1 manufacturer contributing to regional healthcare in the Japanese market

Providing comprehensive medical infrastructure that connects patients, their families, hospitals, andpharmacies, as well as offering medical equipment and pharmaceuticals that meet medical needs inthe marketplace
2 Top share in the global market for dialyzers
Expanding the company's direct sales network and training centers, and accelerating the operation of
our own dialysis centers in emerging countries
3 Deployment of vascular products to the global market and entering new areas in the domestic market
Establishing a sales network for existing products in the U.S. market with a view to expand globally, andaiming for a full range of products in the domestic market in the cerebrovascular and arrhythmia fields
4 Deployment of the drug contract manufacturing business to overseas markets
Promote out-licensing of our GE products in the Chinese market and expand business in the U.S. market
5 Development of high-value-added products and reduction of manufacturing costs in the
PharmaPackaging business
Develop high-quality products for biopharmaceuticals and reduce manufacturing costs by automating
the manufacturing process
6 Enhancement of cellular medicine business
Promote manufacturing automation and expand business into the European and American markets
7 Development of seeds of new businesses
Business expansion into surgical products, electromagnetic wave therapy products, active pharmaceutical ingredients (APIs), and pharmaceuticals in new fields

CAGR
7.0+%

2,000

Net Debt/EBITDA ratio

Net Debt/EBITDA
ratio less than X 5(Times)

7.5

4,500

6.0

5.0

3,000

4.0

2.5

1,500

2.0

8.0

0

0

2018 2019 2020 2021 2022

(Plan)(Forecast)

14.0+%

ROE

X5

6,000

¥200 or higher

EPS*Less thanNet Debt/EBITDA (Right)(100 M Yen)

2025

(Forecast)

EPS/ROE
EPS (Left)or higher

10.0

0

0

2018 2019 2020 2021 2022

¥450,000 M

EBITDAAiming for a level of ¥100,000+ M

Net Debt (Left)(%)

Operating margin ratio
at 9.0+% level

6,000

Maintain around

Net Debt, Net Debt/EBITDA(100 M Yen)
8,000

Net Debt*

Operating margin ratio (Right)

Net sales (Left)

4,000

Enhancements

7.0+%

2025
(Plan)

Shareholder return (dividend payout ratio*)

32.0% (FYE 2022.3)
35.0% (FYE 2023.3)

Maintain

35.0% (FYE 2024.3 -)Annual Dividend/Dividend Payout Ratio
ROE (Right)

Annual Dividend (Left)

Dividend Payout Ratio (Right)

(Yen)

(%)

(Yen)

300

24.0

80

16.0

60

100

8.0

40

30

0

0

20

15

-8.0

0

ROE at 14.0+%

200

-100

2018 2019 2020 2021 2022

(Forecast)* EPS: Earnings per share

2025(Plan)(%)
60

Maintain 35.0% payout
ratio from FYE 2024.3

45

02018 2019 2020 2021 2022

(Forecast)

2025(Plan)* Source of dividends shall be sum of 75.0% of consolidated profitsand 25.0% of non-consolidated profits.

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

09

● Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3● Approaches to SDGs

Outline of the Medium-Term Management Plan

Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3

Capital Investment Policy

Policy on Organization, HR Development, and IT Systems

Objectives
Expansion of the structure for increasing production of medical devices and pharmaceuticals
In cellular medicine business, promote manufacturing automation and expand business into the European and American markets
Incubate new business seeds of surgical products, electromagnetic wave therapy products, APIs,
pharmaceuticals in new fields, etc.
Investment status

Overseas holdings structure⦁ E stablish holdings in Europe, China, and the U.S. to realize business management by regional
headquarters, and matrix management aimed at rapid business decision-making by each
operating company
⦁ Centralize compliance, financial, and tax management⦁ Improve knowledge accumulation and efficiency by consolidating indirect divisions⦁ New business incubation(Millions of yen)

2021

2022
(Forecast)

2021-2025(Plan)

Renewal ofexisting facilities

Medical equipment (dialyzers, catheters, etc.)

15,345

12,338160,000

Pharmaceuticals

13,287

13,98690,000

PharmaPackaging

3,916

19,87630,000

Cellular medicine

Sapporo Plant and manufacturing facilities

16,872

1,214

30,000

Incubation ofbusiness seeds

Production Technology Center,laboratories, etc.

1,624

2,084

10,0005-year guidelines for FYE 2025.3(Millions of yen)

2021

2022
(Forecast)

2021-2025(Plan)EBITDA

447,600

44,040Aiming for
400,000–450,000

Capital investment*

51,98249,500300,000–350,000 range

Free cash flows

21,00012,400Return to profit

Human resources development
⦁ Nurturing training in the medical field to foster a sense of value that enables us to always think and act
from the user's viewpoint.
⦁ Introduction of the FISH philosophy, which aims to revitalize the workplace and encourage employees
to thrive in their work, and promote employee motivation
⦁ Follow-up training for younger employees, training for different levels of qualifications, and othernecessary training for each stage of employment
⦁ Focus on the development of global human resources through selective language training, in-house
language classes, and a self-development support system for languages
⦁ Aim to create a workplace where each employee can maximize their abilities regardless of race,
nationality, gender, or age; conduct seminars to promote women's activities; and organize exchange
meetings to build networks among international employees⦁ Establish a company-wide education and training system to raise compliance awareness⦁ Considering the physical and mental health of each employee, the "Nipro Health Declaration" wasissued in September 2018, and anti-smoking measures, mental health measures, work-stylereforms, and workplace revitalization activities have been promoted* Amount of capital investment based on acceptance inspection

IT systems
⦁ Review system functions to support management efficiently and expeditiously⦁ Enhance security against cyber-attacks, such as unauthorized remittance, information leaks by targeted
attacks, and ransomware⦁ Develop an information infrastructure realizing a work style not confined by time and place, improving
labor productivity and employee satisfaction

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

10

● Aiming to Achieve Consolidated Sales of ¥1 Trillion in the FYE 2031.3● Approaches to SDGs

Outline of the Medium-Term Management Plan

Approaches to SDGs
Social issues that we aim to solve through our business
Providing treatment to patientsin remote areas with limited access⦁ In emerging countries, such as in Latin America, dialysis clinics have been set up in suburban areas to provide dialysis treatment to patients living
in remote areas, where it is more convenient for them to receive dialysis treatment.
⦁ In Southeast Asia and Africa, dialysis clinics have been set up in urban areas to provide patients with high-quality treatment.

Preventing medical accidents at
medical institutions⦁ The company sells safety products to prevent medical accidents while using medical equipment.
⦁ They include winged needles that prevent needlestick accidents, colored syringes that can be distinguished by color to prevent mix-ups, andpre-fillable syringes and kit preparations that reduce the risk of foreign matter contamination, bacterial contamination, and needlestick accidents.

Providing safe and secure
medicines for all⦁ The company promotes products that can be used without difficulty, regardless of age or disability.
⦁ A range of products are offered that enable those with visual difficulties to identify tablets, to write down medication instructions andmedication dates, and to prepare PTP sheets for patients with reduced dexterity.

Dealing with new infections⦁ The company sells products that are in high demand worldwide when new infectious diseases, such as COVID-19, become rampant.
⦁ Surgical masks, medical rubber gloves, tubes and other consumables, blood collection tubes, and disinfectants are stocked.

Stable supply of antimicrobial agentsthat are in short supply⦁ We continue to manufacture and market antimicrobials, although they are unprofitable and there are concerns about the supply of APIs.
⦁ As a precaution against the future supply of APIs, we are developing some of them in-house.

Providing a medical environment forpatients who live in remote ordifficult to access locations⦁ The company sells a cloud-based monitoring system (Nipro Heart Line™) that uses ICT to provide real-time information on patients,
even in remote locations.
⦁ The system enables patients with chronic diseases to receive regular and continuous medical care, sharing vital information in real time, andsending alerts when abnormal values are detected to remotely check the patient's condition.

Enhancing the labor productivity ofhealthcare professionals

⦁ The company sells the HN LINE™, which solves business problems by linking medical device information with electronic medical records.
⦁ The company hopes to support the reduction of labor, efficiency of nursing operations in hospitals, and work-style reforms of healthcare
professionals.

Minimizing the environmental impact
of waste⦁ The heat generated when industrial waste in the manufacturing process is burned in incinerators is reused to generate electricity and hot water,
and the company also emphasizes reducing the volume of industrial waste.
⦁ We promote a paperless office by digitizing internal documents and eliminating meeting materials to reduce the use of paper and other materials.

Promoting efficient use of natural
resources⦁ To reduce the global environmental impact, the company promotes the introduction of solar power generation at its plants as part of energy
conservation efforts.
⦁ At Nipro Thailand, a solar power generation system was introduced in 2018 and the electricity generated is used for medical device manufacturing.

Providing rewarding work
opportunities for all⦁ Training for women in supervisory positions and above is conducted so that they can build a career design with strategies for their work and lives.
⦁ For international students who have received job offers to seamlessly join the company, exchange meetings are held for the purpose of
networking with senior international employees prior to joining.

Related SDG

Contents

Outline of theMedium-Term
Management Plan

Management
Message

About NIPRO

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

11

● Medical-Related Business● Pharmaceutical-Related Business● PharmaPackaging Business

Review of Operations

Medical-Related Business	
Forecast and strategy for the fiscal year
ending March 2022

Overview of the fiscal year ending March 2021

Net sales

Total¥347,648 million

Sales ratio by region
Japan

Overseas

45.0%

55.0%

Others9.9%
Renal
products
Nipro Brand
generic
products

Surgicalproducts

26.5%

35.3%

2.5%

Inspection
products

2.7%

Net sales(Millions of yen)

347,648
327,359 335,767

Fiscal 2021

1.1%

Diabetic
products

Regarding domestic medical device sales, in addition to dialyzers
and renal products, surgical products such as artificial hearts,
heart-lung machines, and consumables (gloves, masks, andgowns) showed strong sales. However, catheters sales declined
year-on-year despite signs of recovery in Q4. Regarding drugs,
sales of oral drugs for outpatient infections decreased year on
year, but dexmedetomidine and other antibacterial injections forsurgery, as well as authorized generic bepotastine POINT steadily
increased market share.
The COVID-19 pandemic continues to have an impact oninternational sales. However, vaccination has begun in various
countries worldwide, and sales activities, such as holding
academic conferences, exhibitions, and resuming tenders, have
gradually returned to normal. Dialyzer sales exceeded the previous
period, while sales of gloves, masks, and gowns remained strongin North, Central, and South America.
As a result, sales in this segment increased to 347,648 million
yen, a 3.5% rise from the previous period, and operating profit was
39,415 million yen, an 8.7% increase from the previous period.

Vascularproducts

8.3%

For the fiscal year ending March 2022, sales are expected toincrease by 7.6% to 373,890 million yen, but operating profit isforecast to decrease by 3.0% to 38,230 million yen.
Regarding domestic sales, medical devices sales are expected
to increase by 16,400 million yen during this period, owing togreater sales of dialyzers, vaccine syringes, catheters, andventricular assist devices/artificial lungs. Drug sales are expected
to decrease by 1,000 million yen due to a decline in in vitro
diagnostics sales. Operating profit is forecast to show only a slightincrease due to lower in drug and regenerative medicine sales.
Regarding overseas sales, we will increase sales of renal
products and hospital products and expand the operation of
dialysis centers, primarily in emerging countries. In the Americas,
revenue is expected to increase by 14,600 million yen in the total
segment compared to this period, owing to higher sales ofvascular products. Although operating profit is affected by the risein transportation costs worldwide due to the COVID-19 pandemic,
we will aim to boost profits by reducing costs.

Operating income (Millions of yen)
36,722

36,24939,415POINT
Bepotastine (Talion AG) obtained about
60% market share in Japan

Injection
products

Bepotastine further increased its domestic share from the previous period to

9.7%

amount is approximately 5,300 million yen based on the National Healthapproximately 60% due to additional indications for children, etc. The sales
Insurance drug price.
Infusion Products

4.1%

2019

2020

2021

2019

2020

2021

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

12● Medical-Related Business● Pharmaceutical-Related Business● PharmaPackaging Business

Review of Operations

Medical-Related Business

TOP I CS

Overseas business

Domestic business

Establishment of the sales system for vascular products

Implantable ventricular assist device HeartMate 3
In Japan, sales of the implantable ventricular assist device HeartMate 3, which will be available from June
2019, were robust. In December 2020, indications for treatment aimed at improving QOL (improvementof life prognosis, simplification of home care management, etc.) were added for patients with severe
heart failure for whom heart transplantation is not indicated, and health insurance coverage was granted
on May 1, 2021. Taking advantage of this opportunity, we will expand our market share in Japan andcontribute to improving patient health.
	
Increased production of Nipro syringes (low dead space type)and starting production of new Nipro VA syringes
In response to the demand for syringes associated with COVID-19 vaccination, we increased
production of Nipro syringes (low dead space type) and recently began the production of new Nipro
VA syringes. Six doses of the Pfizer COVID-19 vaccine can be taken with a Nipro syringe (low deadspace type), while seven doses can be taken with a VA syringe, resulting in less residual liquid.
The total production volume of Nipro syringes (low dead space type) and new Nipro VA syringes
in this period is expected to reach approximately 100 million syringes due to the establishment of
production systems at the Odate and Thailand plants.
Nipro syringe (low dead space type)

Nipro VA syringe (new type)

The Vascular Product Sales Department was established in Nipro Medical Corporation’s (NMC)
North American Division to establish a sales system in the U.S. They primarily handle dialysis accessproducts and intervention accessories, and coronary artery imaging. We will continue to improve theproduct lineup both inside and outside the group, as well as expand sales.
Expansion of our company’s sales network in China
Dialysis patients in China are expected to number
632,000 in 2019 and 1,450,000 by 2025. The market
is expected to expand further in the future. Nipro is
working to expand its sales network in China suchas by opening new business bases and increasing
personnel. Thus, we will further strengthen attentive
scientific and technical sales activities for customers,
as well as the dialysis machine maintenance andmanagement system.
Furthermore, we will promote “locally produced
and consumed” by expanding sales of AVF needles
manufactured in Shanghai and dialyzers manufactured in Hefei. We will also try to increase sales ofrenal products in China by strengthening the dialysis
center operating business.

29 Provinces and 35 businessbases with 262 employees(as of end of March 2021)

Expansion of our own dialysis centers●A chieving low dead space by making a protruding shaped●A chieving low dead space through a one-piece design of●A ble to attach needles of all sizes and lengths●A needle length of 25 mm that is sure to reach the muscle;gasket tip

needle and outer cylinder

25 G in thickness is adopted considering usability at the timeof suction and infusion of the content.

We have established and increased our own dialysis centers, one of our new major businesses, in Latin
America, where our own dialysis centers have been expanding for many years, as well as in China andThailand in the Asian region, where demand is expected to grow further in the future. We will continue tocontribute to regional medical care by providing high-quality treatment, primarily in emerging countries.

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

13

● Medical-Related Business● Pharmaceutical-Related Business● PharmaPackaging Business

Review of Operations

Pharmaceutical-Related Business
Outlook and strategy for the fiscal year
ending March 2022

Overview of the fiscal year ended March 2021

Net sales

Total¥68,564 million

Supply records(May 2021)

Injectables

OrallyAdministered
Drugs

External
Preparations

Ampoules (glass/plastics)
Vials (powder/liquid/lyophilized products)

Tablets

Tapes (solvent type)730 million units

Pre-filled syringes (PFS®)

14.8 billion tablets
Capsules

120 million sheets

400 million capsules 580 million sheets

Dual chamber bags (PLW®)

Granules, dry syrups

Liquid-liquid dualchamber bags

4 million units

610 tons
Syrups460

thousand bottles

Net sales

Tapes (hotmelt type)

160 million units
33 million units

In the pharmaceutical-related business, we continued to expand
the contract manufacturing business by actively increasing
production capacity and promoting proposal-based contract
manufacturing. In this period, we started the shipment of multiple
new contract manufacturing products through proposal-based
sales such as total contract manufacturing from investigational
products of the development stage to commercial products.
In addition, reinforcement of the production system in response to
an increase in orders for syringe formulations contributed to anincrease in sales volume and net sales.
However, sales were affected by a decrease in the production
volume of some products due to the impact of the COVID-19 pandemic as well as a temporary decrease in the shipment volume of the
Kagamiishi Plant, Nipro Pharma Corporation, due to the earthquake
off the coast of Fukushima Prefecture on February 13, 2021.
As a result, net sales in this segment decreased by 2.5% from theprevious fiscal year to 68,564 million yen, and operating income
decreased by 23.7% from the previous fiscal year to 10,072 million yen.

63,48270,357(Millions of yen)

Operating income (Millions of yen)

68,564

13,196
10,662

POINT
10,072390 million sheets

expand the production volume of injectable drugs. The site area of the newplant is about 100,000 m2, and the facility will be completed in January 2024.

(converted to 10g-sheet units)

This plant will have an independent and dedicated antimicrobial injectabledrugs area and a general injectable drugs area, and will manufacture dual

Ointments, creams

16.3

Construction of a new plant
We are planning to construct a new plant in Ritto, Shiga Prefecture, to further

Poulticesmillion tubes(converted to 10g-tube units)

For the fiscal year ending March 31, 2022, net sales are estimatedto reach 76,300 million yen and operating income to reach 10,230
million yen, an increase of 11.3% and 1.6%, respectively, from thecurrent fiscal year.
Net sales are expected to increase by about 3,800 million yen
due to the commencement of contract manufacturing of "VaxzevriaTM
Intramuscular Injection," a COVID-19 vaccine developed by
AstraZeneca, and the start of shipment of export products to theUSA. Sales in the entire segment are expected to increase by about
7,800 million yen, including about 4,000 million yen generated fromthe reclassification of the sales by JMI Pharma, an affiliated company,
from medical-related business to pharmaceutical-related business
in FY2022.
Although the operating income generated by the aforementioned JMI Pharma sales reclassification is expected to reachabout 470 million yen, the operating income in the entire segment
is expected to increase by 160 million yen.
In the pharmaceutical-related business, we will reinforce ourexisting facilities and construct a new plant in order to expand ourPOINTbusiness and strengthen our stable supply system in the future.

chamber bag products and vial products.

2019

2020

2021

2019

2020

2021

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

14● Medical-Related Business● Pharmaceutical-Related Business● PharmaPackaging Business

Review of Operations

Pharmaceutical-Related Business

TOP I CS

Efforts to improve quality
The following measures are being taken at the pharmaceutical production plants, mainly of Nipro
Pharma. We continuously make efforts to improve quality by fostering a quality-oriented culture andstrengthening the quality assurance system.
Holding quality exhibitions
Checking operations at the
manufacturing site by line QA

Preparing effective recurrence
prevention measures byanalyzing true causes

Conducting unannounced
internal audits

Strengthening the managementof drug substances ofpharmaceutical products

Implementing regularquality training

Promoting site walks

Odate Plant, Nipro Pharma Corporation
At the Odate Plant, Nipro Pharma Corporation, a pre-filled syringe
line has been added to reinforce our stable supply system.
We started production on the 40 mL/50 mL line in March 2021 andon the 20 mL line in May 2021. The maximum annual production
capacity is 20 million vials, with 14 million vials scheduled to be
produced in this period.

Newly installed pre-filled syringe line

Strengthening the system to increase production at oral drugs plants

Training using a consulting company

Efforts to strengthen the production system
Strengthening the system to increase production at injectable drugs plants
Ise Plant, Nipro Pharma Corporation
New pre-filled syringe lines are being constructed at the Ise Plant,
Nipro Pharma Corporation. The construction will be completed in
November 2021, and production is scheduled to start in February
2023. We are planning to introduce two lines, with an annual production capacity of 59 million vials for the 1–3 mL line and 55 million
vials for the 5 mL/10 mL line. In the first year of production, that is the
fiscal year ending March 2024, we expect an output of 6 million vials New building for pre-filled syringe line
under construction
from the former line and 33 million vials from the latter line.
Production has already started at the newly introduced small-volume vial line. We are planning to start
manufacturing new products in June 2021, and the production volume in this period is expected to be 6.5
million vials. In the year ending March 2023, we are planning to operate at nearly full capacity with the
production of six commercial and prototype products.

Zensei Pharmaceutical Co., Ltd.
A new building is planned to be constructed at the Kishiwada Plant,with operations expected to start from December 2022. In this newbuilding, Zensei Pharmaceutical will establish a production systemcapable of handling investigational products and highly active
preparations, as well as expand and improve the testing and warehouse areas. The plan is to increase the annual production capacityof the entire plant to 3 billion tablets.

Image of the new building's testing area

Kagamiishi Plant, Nipro Pharma Corporation
The Kagamiishi Plant, Nipro Pharma Corporation, temporarily stopped operations due to the earthquake off the coast of Fukushima Prefecture in February 2021. However, the production resumed at
all manufacturing lines in May.
We will work on building a system for further production increases in addition to earthquake
countermeasures in the future.
Saitama Site, Nipro Pharma Corporation
At the Saitama Site, Nipro Pharma Corporation, we increased production capacity from 700 million
tablets to 1,400 million tablets by introducing major equipment to the newly acquired plant in 2018.
In addition, a production system including BCP measures has been established as a core plant
for new Oral Drugs. We are also establishing a system to increase the production of external
preparation products.

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

15

● Medical-Related Business● Pharmaceutical-Related Business● PharmaPackaging Business

Review of Operations

PharmaPackaging Business	Forecast and strategy for the fiscal year
ending March 2022

Overview of the fiscal year ended March 2021
In this period, sales of primary packaging container products

For the fiscal year ending March 31, 2022, net sales are projected

such as vials; rubber stoppers, and shipments of sponge swabs

to be 44,630 million yen, up 15.5%, and operating income offor the COVID-19 antigen test kit significantly increased in the

2,120 million yen, up 6.5% from the current fiscal year.

domestic market.

* CURACASETM: CE marking in progress

Net sales

Total¥38,655 million

Sales ratio by region

High demand for vials for COVID-19 vaccines, syringe sales

Due to the strong demand for COVID-19 vaccines overseas,

reinforcement for bio-pharmaceutical drugs in Europe, the U.S.,

sales of glass tubing and vials soared in the European and U.S.

and China, and the acquisition of Piramida in Europe will lead tomarkets. Furthermore, sales of sterilized glass syringes for

an increase to our sales. However, a slight decline in India sales

bio-pharmaceutical drugs also increased. In China, a major vaccine

was to regular furnace maintenance impacting the production

manufacturer adopted our global standard vials for COVID-19

volume. Eventually we expect to increase sales by 5,975 million

vaccines, which contributed to a significant increase in sales. POINT

yen over the current fiscal year.

Consequently, net sales in this segment increased by 6.7%

Despite the significant climb in net sales, operating income isfrom the previous fiscal year to 38,655 million yen, and operating

expected to increase slightly by 128 million yen over the current

income increased almost three times from the previous fiscal year

fiscal year because of increasing costs for furnace repairs andto 1,992 million yen.

investment for the expansion of furnaces, syringe lines in Germany,and vial lines in France.

India

Japan

3.0%

28.9%

China

10.0%
EuropeFiscal 2021

35.3%

POINT
Net sales
35,526(Millions of yen)

36,217

Operating income (Millions of yen)
1,992

38,655

778
America

675

22.8%
2019

2020

2021

2019

2020

2021

Market environment and growth strategies
In developed countries, the demand for premium pharmaceutical packaging
for higher-quality drugs (such as bio-pharmaceuticals, etc.) is increasing, atthe same time, in developing countries, the demand for pharmaceuticalcontainers is expected to grow along with the rise in middle-income earners.
The COVID-19 pandemic has triggered countries to reinforce healthcare
measures, and health expenditures are expected to be restrained further.
Moreover, the demand for pharmaceutical containers is expected toskyrocket due to the development of vaccines and therapeutic agents.
Based on the recognition of these business environments, we will
strive to expand our market share in each country by setting the following
four growth strategies: consolidating product competitiveness, developinga stable supply system, expanding market coverage, and reducing
manufacturing costs.

Contents

About NIPRO

Outline of theMedium-Term
Management Plan

Management
Message

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

16● Medical-Related Business● Pharmaceutical-Related Business● PharmaPackaging Business

Review of Operations

PharmaPackaging Business

TO P I C S

Expansion and new construction of furnaces

Developing stable supply system

As the demand for glass containers for pharmaceutical use increases around the world, Nipro will
strengthen its glass tubing manufacturing system by expanding the existing line at the Millville Plant in
the U.S. and constructing a new furnace at the Aumale Plant in France by the end of 2022.

Expand production capacity for glass syringes
The global market for glass syringes is expected to grow at a CAGR of 5% by 2030. Considering
this market trend, Nipro will focus on the sales of sterilized glass syringes (D2FTM) and expand the
production at the Biwako Plant in 2022 and the Germany Plant in 2023, aiming to triple the current
syringe sales by 2030.

STERI-PLUSTM (washed and sterilized vials)

Global market forecast forglass syringes (1 million syringes)

Sales plan

8,000

300

4,000

150

CAGR 5%

2021

2025

2030

(100 Million yen)

STERI-PLUSTM, a set of sterilized vials, rubber stoppers, and aluminium caps, was launched this year. Allowing small orders andJapan

CAGR 15%

2021

2025

2030

* Market size: In-house forecast

requirements, STERI-PLUSTM offers a broad range of variations toChinafulfill the needs of various applications such as drug manufacturing,in-house manufacturing, conformity testing, and clinical experiments.
Leveraging the ready-to-use advantage, we aim to strengthen oursales to gain a leading share of the global market.

The global market for vials is expected to grow at a CAGR of 3% by 2030. As vials are expected to
grow in each region, Nipro will gradually increase production lines at all manufacturing bases.
Together with strengthening sales of high-value-added vials (VIALEX TM), we aim to address new
demand for biopharmaceutical drugs and double the current sales of vials by 2030.
Global market forecast
for vials(1 million vials)

Sales plan

40,000300

20,000150

CAGR 3%

2025

2030

* Market size: In-house forecast

complying with pharmaceutical industry-grade manufacturing

Europe & U.S.

Expand production capacity for vials

2021

Expansion of product portfolio

STERI-PLUSTM

Nasal spray device
We are developing nasal spray devices that can be combined witha pharmaceutical container to simplify operation, ensure safety, andenhance efficacy of administration. The device offers a painless(100 Million yen)and fear-free administration to children and the elderly. It ensures

CAGR 6%

2021

2025

2030

India

that the same dosages are administered to both nostrils, regardlessJapanof the operator’s skills. We will continue to develop products that

Europe & U.S.

fulfill needs in the medical field, including vaccines.

China

Nasal spray device

Contents

Management
Message

About NIPRO

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

17● Research and Development Activities● Status of Corporate Governance● Outside Directors’ Messages● Board of Directors and Audit & Supervisory Board Members

Management Foundation

Research and Development Activities
Contributing to Innovation in Medical Care through Original Technologies and Ideas
Nipro has seven research and development sites, centered on the Research and Development Institute and Pharmaceutical
Research Laboratories in Japan and the United States. We continually address the needs and issues of medical professionals

4 Sapporo-Shi, Hokkaido
1

2

3

Kasukabe-shi, Saitama
Kawagoe-shi, Saitama

and patients as we work to develop and provide high-value-added products.

2

1

Research andDevelopment Institute

Number of employees

224
Research themes⦁ Cellular and regenerative medicine products⦁ Orthopedic surgery-related products⦁	Dialysis-related and general medical devices⦁	Circulatory organ- andintervention-related products⦁ Artificial organs
⦁ Test and diagnosis-related products
⦁ High-performance medical containers⦁ Medical glass products

Status of industry-academia
collaboration
Implementation of research aimed at the joint
development and early realization of new products, in collaboration with universities andresearch institutions throughout the world.

2

Kusatsu-Shi, Shiga

5 Seto-Shi, Aichi

6

Pharmaceutical
Research Laboratories

6

7

California, USA

Massachusetts, USA

AVANTEC VASCULARCORPORATION

Number of employees

Number of employees

168

35

Research themes

Research themes⦁ Injection products⦁ Oral solids
⦁	Medical supplies for external application
⦁ Cancer drugs and biosimilars
⦁ High-performance medical containers

⦁ Vascular retrieval system⦁ Neurovascular/peripheral coils
⦁ Peripheral Atherectomy
⦁ Specialty coronary/peripheral DES

3

Production Technology
CenterNumber of employees

57
Research themes
The establishment of new production technology and the design and development ofequipment to increase production, in order toenhance productivity.

4

Regenerative
Medicine R&D Center

5

Goodman Medical
Innovation Center

Number of employees

Number of employees

138

61

7

Research themes

Research themes

Number of employees

Manufacturing equipment and consumables forthe realization of regenerative medicine using
autologous bone marrow cells for strokes andspinal cord injuries.

⦁	Catheters and accessories for cardiac andcirculatory organ inspection and therapy⦁	Catheters and stents for cerebral blood vessel
therapy⦁ Vascular access catheters

Status of industry-academia
collaboration
Conclusion of collaboration research agreement
concerning strokes and spinal cord injuries, andlicense agreement on regenerative medicine patents with Sapporo Medical University.

Status of industry-academia
collaboration⦁	Performance of physician-led clinical trials
with the National Cerebral and CardiovascularCenter⦁	Implementation of research in collaboration
with Hiroshima University

Infraredx, Inc.

71
Research themes
⦁ IVUS+NIRS Intravascular Imaging
⦁ Thin-cap algorithm
⦁ IVUS auto-detection software⦁ Dialysis monitoring⦁ Optical fractionl flow reserve (FFR)

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Management Foundation

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

18

● Research and Development Activities● Status of Corporate Governance● Outside Directors’ Messages● Board of Directors and Audit & Supervisory Board Members

Research and Development Activities

In our group, our company plays a significant role in promoting medical device and drug R&D operations

treatment, we have marketed a mobile echo “ECHOMO,” which allows healthcare professionals toat the Nipro Life Science Site in Minami-Kusatsu, Shiga.

treat patients while watching a monitor in a catheterization laboratory, avoiding radiation exposure or

In the medical-related business, the University of Tokyo/Nipro R&D Center was established on the

combining with angiography equipment. We created a “training kit for endoscopic spinal surgery” aspremises of the University of Tokyo Hospital, and we concluded a joint research general agreement ina minimally invasive orthopedic device because cadaver surgical training cannot be conducted over-March 2019. We have established the R&D plan, etc., and began joint research development with phy-seas due to the COVID-19 pandemic.

sicians from each specialized department to proceed with the “development of innovative medical
technologies/devices for the next generation.” We are constantly striving to create and develop new,easy-to-use medical products for healthcare professionals. In the pharmaceutical-related business, we

Division of Renal Products

develop high-quality generic drugs for all therapeutic areas and dosage forms to reduce drug costs andHeparin sodium is encapsulated in the blood flow path of the catheter when extracorporeal circulation

improve medical care quality. We are also focusing on the development of value-added products, suchis not performed. We marketed heparin sodium pre-fillable syringes with enhanced safety and conve-

as easy-to-take orally disintegrating tablets and kit preparations for use in clinical settings. The total

nience for the procedure.

R&D cost for the current consolidated fiscal year was JPY 18,652 million.
R&D activities by segment are as follows:

1. Medical-related businesses
The following research and development is primarily conducted by our Research and Development Institute and Enzyme Center.

Division of Medical Devices

Division of Inspections
We have marketed Cocoron, an electrocardiograph transmitter that enables continuous heart ratemonitoring, linking with HNLINE, a dedicated heart line app. In addition, Nipro Heart LineTM has beenrenewed as a system that can be used in various situations such as monitoring of home medical
treatment, monitoring the elderly, online instruction on the use of drugs, and measures against
COVID-19 infection.

Division of Diagnostics

A capillary is used for blood collection in animal experiments, etc., conducted at universities and drug

We launched a urinary trypsinogen-2 dip stick test as an in vitro diagnostic for acute pancreatitis after

manufacturers. We marketed “HUMANEWAY,” a blood sampling needle for test animals, enabling safe

its coverage by the National Health Insurance.

and simple blood collection. In addition, the 700, 2-way spike type with an intermediate tube, was lined
up as a new type of Nipro infusion set.

Division of Circulatory and Interventional Products
Regarding the catheter “Filtrap II,” “Filtrap II GP” with a modified tip structure has been developed toenable combination use of the guide extension catheter “Guide Plus.” In addition, in peripheral vascular

Division of Functional Pharmaceutical Containers
We marketed a new half-kit drug product that prevents needle hole clogging caused by specific antibiotics, allowing drug vials with a small-diameter aluminum part to be used without an adapter. In addition, we created a nest syringe for nasal administration.

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Management Foundation

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

19

● Research and Development Activities● Status of Corporate Governance● Outside Directors’ Messages● Board of Directors and Audit & Supervisory Board Members

Research and Development Activities

Division of Cell Therapy Products
We have commercialized “Froze Tube,” a closed system cryopreservation container that can reduce theoping products, focusing on difficult-to-develop areas, such as extended-release injectable drugs. Thisfiscal year, we launched two vial products containing one active ingredient and one generic drug forpre-fillable syringes containing one active ingredient.

risk of contamination during cryopreservation of cells, and a dedicated plastic needle “Air Vent Needle
VT-1” to extract cells from the container. We are now proceeding with the marketing of these products.

Medical Training Divisions

Oral drugs
We are developing complex extended-release drug products in addition to common oral drugs (tablets,
granules, etc.). Simultaneously, we offer products with ingredient names printed on tablets to improve

Due to the COVID-19 pandemic, we discontinued our conventional group training with several partici-

convenience in medical settings, as well as products in which we exercise our ingenuity in packaging

pants. We quickly switched to training with a small group of participants. We worked on providing “online

specifications such as individual packages and aluminum pillow packages. This fiscal year, we launchedtraining where the participants could experience practical training” for the participants and instructors,

18 generic drugs containing seven active ingredients. We also obtained marketing approval for 16 prod-

who attended remote training sessions. In addition, a webinar for doctors all over the world was held at

ucts containing six active ingredients.

iMEP (Belgium), and numerous doctors from Japan participated online. We have also provided programs
that combine demonstration procedures with lectures, such as online dialysis training. Our training style,in which lecturers and participants converse using remote training equipment, has been well received.
The R&D cost for this project was 8,798 million yen.

External-use products
We are developing several generic drug products, including patches. We are also developing a transdermal microneedle drug product based on the new concept of “injectable drugs to be applied on the

2. Pharmaceutical-related businesses
The following research and development is conducted primarily by our Pharmaceutical Researchskin,” and we are newly preparing a production line for an investigational product. This fiscal year, welaunched two inhalation drug products with a combination of two active ingredients and four generictransdermal tape drugs containing one active ingredient.

Laboratories.
Biosimilars
Injectable drugs

Japan’s biopharmaceutical market is rapidly expanding. Since they are generally expensive, thedemand for biosimilars with lower drug prices is growing in order to reduce medical costs. Based on

In addition to ordinary vial products and bag products, we are actively developing kit drug products tothis, we aim to develop products in collaboration with a manufacturer of bio-drug substances that are

improve convenience in medical settings. We have already marketed double-chamber pre-fillableof comparable quality, etc., to the original drugs with a price advantage.

syringes for leuprorelin acetate (one-month drug product) (Brand-name drug: “Leuplin” Takeda Phar-

The R&D cost in this business segment was 9,853 million yen.

maceutical) used in the treatment of prostate cancer, premenopausal breast cancer, etc. We are devel-

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Management Foundation

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

20

● Research and Development Activities● Status of Corporate Governance● Outside Directors’ Messages● Board of Directors and Audit & Supervisory Board Members

Status of Corporate Governance1. Corporate Governance System(1) Corporate Governance System and Reasons for Adoption
Nipro Corporation has an established corporate governance system including organizations for the
Meeting of Shareholders and directors as required under the Companies Act, in addition to a Boardof Directors, Audit & Supervisory Board Members, Audit & Supervisory Board, and an Accounting
Auditor. Nipro 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 proprietyof operations across the company as a whole.
(2) Internal Control Systems
Nipro strives to make business units the foundation of its internal control system for the Nipro Group
as a whole. Nipro’s directors and Audit & Supervisory Board Members, as well as representatives ofeach of the major companies of the group, hold a group management 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 of compliance with laws, regulations andcorporate ethics among executives and employees, Nipro has established the “Nipro Code of Practice,” and has thoroughly informed everyone in the company.
(3) Risk Management System
Nipro has established risk management regulations and a system for managing business and otherspecific risks. Their purpose is to recognize and neautralize risks that could have a material impact
on business operations, in an appropriate and comprehensive manner. Nipro has also established
an Operational Risk Management Committee to ensure cross-sectional management across allgroup companies. The committee endeavors to further strengthen risk management systems toprevent, avoid, and learn from risks and crises. Nipro has also established a Sanction Committee,
chaired by the President, which endeavors to ensure sound business management through theappropriate handling of sanctions. Nipro produced a Disaster Prevention and Crisis Management
Handbook and distributed it to each employee within the Nipro Group. Nipro tries hard to keep
employees fully informed about taking calm and appropriate action when faced with disasters andabout reassessing and renewing business continuity plans as appropriate. In addition, to strengthen
our rollout of compliance training and enhance our risk management system, Nipro established aCompliance Section within its General Affairs Department, and is working to ensure awareness ofcompliance among employees.

(4) Basic Structure of Corporate Governance and Risk Management
Meeting of Shareholders
Election
Accounting
Auditor(Directors)
Board of Directors(Auditors)
Board of Auditors

Committees[Decision-making]Accounting
Audit

Operational
Audit

Supervision of Directors’
execution of duties

President

Third Party(i.e., lawyer,
accountant)

Director withresponsibility for operation
Division General Manager, Operating Officer,
Manager, Assistant Manager

Operational Risk
Management
Committee

Employees, etc.
Conceptual diagram of corporate governance(5) Business Continuity Planning (BCP)
At workplaces in Japan, we are improving our systems for disaster preparation and smooth continuityof business in the face of risks such as outbreaks of new types of influenza and large-scale natural
disasters, including major (around magnitude 6) earthquakes originating in the Nankai Trough. At
overseas workplaces, we are also preparing for risks including war, civil war, riots, terrorism, anti-Japanese demonstrations, and strikes.

2. Internal and Statutory Auditing(1) Internal Auditing
Nipro has established the Internal Audit Division, consisting of the Audit Office and the Overseas Audit
Office, and conducts audits of accounting and other operations based on internal audit protocols.

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Management Foundation

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

21● Research and Development Activities● Status of Corporate Governance● Outside Directors’ Messages● Board of Directors and Audit & Supervisory Board Members

Status of Corporate Governance(2) Statutory Auditing
For each statutory audit, Audit & Supervisory Board Members attend key meetings such as those of
the Board of Directors, in accordance with the auditing policy and roles determined by the Audit &Supervisory Board. Audit & Supervisory Board Members receive performance reports from directors
and employees, and are able to request further explanation when necessary, and inspect key documents. Audit & Supervisory Board Members also undertake other auditing duties such as investigating
the state of operations and assets in key places of business. Audit & Supervisory board meetings areheld regularly, or as necessary, in order to exchange views and hold discussions.

3. O utside Directors and Outside
Audit & Supervisory Board Members(1) Outside Directors and Outside Audit & Supervisory Board Members
Two of the directors are Outside Directors and two of the three Audit & Supervisory Board Members
are Outside Audit & Supervisory Board Members. The two Outside Directors and one of the Outside
Audit & Supervisory Board Members have been designated as independent directors/Audit & Supervisory Board Members, and the Tokyo Stock Exchange has been notified of their designation.
(2)	Policy and Criteria for Independence from the Filing Company in the Election of Outside Directors
and Outside Audit & Supervisory Board Members
Nipro determines the criteria for the independence of Outside Directors and Outside Audit & Supervisory Board Members as a part of separate corporate governance guidelines taking into consideration the provisions stipulated under the Financial Instruments and Exchange Act. In the event thateither case does not fall within the scope of this criteria, Outside Directors and Outside Audit & Supervisory Board Members are deemed to be independent from the Company and that there is no possibility of a conflict of interest with general shareholders.
(3) Approach to the Election of Outside Directors and Outside Audit & Supervisory Board Members
Close coordination with the Internal Directors and the full-time Audit & Supervisory Board Members,
employees of the Audit Office and assigned staff from the management section of the head office (asneeded) ensures sufficient cover to implement the supervision and the audit function and role as
required by the current corporate governance system.

(4)	Mutual Collaboration between Outside Audits and Internal, Statutory and Accounting Audits, andthe Relationship between Internal Control Divisions
The Outside Directors attend meetings of the Board of Directors and supervise our management basedon their extensive knowledge and management experience from an independent standpoint. The Outside Audit & Supervisory Board Members carry out auditing activities including attending key meetings
such as meetings of the Board of Directors in accordance with the audit policy and roles determinedby the Audit & Supervisory Board. They are able to access reports via the full-time Audit & Supervisory
Board Members or directly from directors and employees, and inspect key documents. The Outside
Audit & Supervisory Board Members also attend periodic or occasional meetings of the Audit & Supervisory Board to contribute to discussions and exchange opinions from an objective and independent
viewpoint. The Outside Audit & Supervisory Board Members strive to facilitate a smooth audit service
through close collaboration with employees of the Audit Office, the full-time Audit & Supervisory Board
Members, Audit & Supervisory Board Members of subsidiaries, and the accounting auditor.

4. Accounting Audits
Name of Accounting Auditor: Hibiki Audit Corporation
Names of Certified Public Accountants conducting the Audit:
Kazuhiro Bando, Miho Ishihara, Takanori Nakasuka

Support Staff for Audits:
Certified Public Accountants: 18
Other Staff: 1

Remuneration Paid to Directors and Audit & Supervisory Board Members
Millions of yen
Total amount of
remuneration

Internal Directors
Internal Audit & Supervisory Board Members
Outside Directors, Outside Audit &Supervisory Board Members

¥

249
7

Total amount of remuneration by type
Basic remuneration¥

16

Non-monetarycompensation, etc.

Bonus

Number of eligible
corporate officers

241
7

8
—

—
—

28
1

16

—

—

4

Thousands of U.S. dollars

Internal Directors
Internal Audit & Supervisory Board Members
Outside Directors, Outside Audit &Supervisory Board Members

Total amount of remuneration by type

Total amount of
remuneration

Basic remuneration

$

$

2,255
65
151

Bonus

Non-monetarycompensation, etc.

Number of eligible
corporate officers

2,177
65

78
—

—
—

28
1

151

—

—

4

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

22

● Research and Development Activities● Status of Corporate Governance● Outside Directors’ Messages● Board of Directors and Audit & Supervisory Board Members

Management Foundation

Outside Directors’ Messages
I look forward to stimulating
discussions at a higher level andcontinued growth in the future.
Nipro’s Board of Directors is steadily taking steps to strengthen
governance, including the introduction of an executive officer
system in 2020 to separate supervision from execution. As the
Yoshiko Tanaka
company aims to enter the prime market, it is required to
Outside Director
appoint at least one-third of independent outside directors to
its board in accordance with the TSE’s market reclassification.
To this end, Nipro is currently considering reducing the number of its directors and increasing that ofoutside directors for the fiscal year ending March 2022.
Regarding this increase in outside directors, while it is important to have management experience atother companies, it is even more important to appoint individuals who can provide insight that is in linewith Nipro’s uniqueness. We believe that appointing outside directors who have experience in the medical
field and can provide insight from the user’s perspective will help improve Nipro’s corporate value.
Nipro’s goal is to become a corporate group with sales of 1 trillion yen by the fiscal year ending
March 2031. To achieve this goal, it is essential that we not only improve the performance of eachbusiness segment but also engage in a series of more comprehensive discussions, including a review
of our business portfolio. I hope that the reduction in the number of directors will lead to high-level
discussions on management as a whole.
Furthermore, to achieve our mid- to long-term goals, it is also important to address sustainability,
including ESG considerations. On the environmental front, Nipro has introduced a solar power
generation system at our plant in Thailand, and on the social front, we have taken various measures
such as to create a comfortable working environment for women. The most important issue, however,is to fulfill our responsibility to society as a comprehensive medical manufacturer that contributes topeople’s health by enhancing product competitiveness and continuing to manufacture safe andreliable products. To achieve this, securing core human resources for the company is our futurechallenge. We will need to further reform our personnel system, including the mid-career hiring of
exceptional R&D talent. I would like to contribute more than ever to Nipro’s future evolution.

I will make the most of my experience
accumulated in medical practiceand provide insightsfrom the user's viewpoint.
I have more than 50 years of experience in the areas of nursing
and clinical nursing management. I was engaged in clinical
Yoshiko Shimamori
medicine mainly as a nurse for about 30 years after graduating
Outside Director
from nursing school. Subsequently, I accumulated experience inthe field of supporting clinical medicine from the management
perspective as a director of a nursing association, director of the nursing department at a university
hospital, and professor at the university of health sciences, for 20 years.
Through my experience, I have found ensuring the quality and safety of medical care to be a significant
challenge. In 2005, I was involved in the establishment of the Japanese Society for Quality and Safety in
Healthcare. The responsibility to prevent medical accidents and ensure the safety of medical devices arestill major issues today. In that respect, my impression of Nipro has been that it manufactures products thatmeet the safety requirements of healthcare professionals and patients in a very honest manner rather thanjust manufacturing cost-effective and profitable products. As I have been working in the medical field formany years, I believe I can provide insights on product development from the user's viewpoint.
I also believe that knowledge of clinical nursing management can be used in human resource
development. Currently, the Japanese Society for Nursing Administration and Management, to which
I belong, is organizing the workshop, “Summarizing own thoughts and telling them to other people.”
Hospitals are different from manufacturers. However, as a global company, Nipro has a wide variety of
personnel, and I think it is important to promote such initiatives as an organization.
In recent years, medical and nursing services have been going through major changes due to thedeclining birthrate and aging population, changes in the sense of the community, and the COVID-19
pandemic. Under these circumstances, Nipro is required to understand the needs of the medical fieldand create useful products for society. As a global manufacturer, Nipro is also expected to develop
business by making the most of the cooperation with each region. As an outside director, I will contributeto achieving this goal.

Contents

About NIPRO

Outline of theMedium-Term
Management Plan

Management
Message

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

23● Research and Development Activities● Status of Corporate Governance● Outside Directors’ Messages● Board of Directors and Audit & Supervisory Board Members

Management Foundation

Board of Directors andAudit & Supervisory Board Members
As of June 25, 2021

Yoshiko Shimamori

Yoshiko Tanaka

Kenichi Nishida

Yasushi Oyama

Takehito Yogo

Outside Director

Outside Director

Managing Director

Managing Director

Managing Director

Tsuyoshi Yamazaki

Kyoetsu Kobayashi

Kiyotaka Yoshioka

Yoshihiko Sano

Toshiaki Masuda

Kimihito Minoura

Kazuhiko SanoManaging Director

Managing Director

Managing Director

President & Representative Director

Managing Director

Managing Director

Managing Director

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section

NIPRO Annual Report 2021

24

● Research and Development Activities● Status of Corporate Governance● Outside Directors’ Messages● Board of Directors and Audit & Supervisory Board Members

Management Foundation

Board of Directors and Audit & Supervisory Board Members
As of June 25, 2021

President & Representative Director

Yoshihiko Sano

Directors

Mitsutaka Ueda

Hiroshi Sudoh

Yoshiko Tanaka

Yoshiko Shimamori

Deputy General Manager Medical
Technology Division for Planning,
Development & Marketing;
Medical Instruments Development andTechnical Sales Headquarters

Medical Technology Division for Planning,
Development & Marketing; Product Planning
Headquarters

May 1983 :	General Manager, Drug
Department, Tokushukai Medical
Corporation, Osaka Headquarters

Apr. 1990 :	Manager of Nursing Division of
Preparatory Office for Toho
University Sakura Medical Center

Hiroshi Yoshida

Jun. 1997 :	General Manager, Planning andManagement
Department, and General Manager,
Drug Department, Tokushukai
Medical Corporation, Osaka
Headquarters

Aug. 1990 :	Manager of Nursing Division ofTokyo Saiseikai Mukojima Hospital

Yozo Sawada

Managing Directors

Intellectual Property Department

Kiyotaka Yoshioka

Kazuhiko Sano

Domestic Division, Business Strategy Office
Headquarters

Construction & Engineering Headquarters;
Production Technology Development Division;
Production Technology Center

Toshiaki Masuda

Kenichi Nishida

Medical Technology Division for Planning,
Development & Marketing; Research &Development Center

Pharmaceutical Division

Hideto Nakamura
General Affairs/Human Resources
Headquarters

Yasushi Kutsukawa
Domestic Division; Medical Sales & Marketing
Headquarters; Business Strategy Office

Masayuki Ito
Kyoetsu Kobayashi

Yasushi Oyama

Global Production Division; Odate Plant

Vascular Division; Vascular Product Sales
and Development Headquarters

Kimihito Minoura

Takehito Yogo

Division of Regenerative and Advanced
Therapy; New Business Development
Headquarters

Corporate Planning Headquarters(Chief Financial Officer)

Surgical Devices Division; Medical Technology
Division for Planning, Development &Marketing; Domestic Product Development
and Technical Sales Headquarters

Masanobu Iwasa

Global Business Division; PharmaPackaging
Division

Medical Technology Division for Planning,
Development & Marketing; Enzyme Center;Research & Development Center;
Department III; LFR Business Office

Akio Shirasu
Medical Technology Division for Planning,
Development & Marketing; Research &Development Center; Research Management
Department; Research & Development
Institute for Artificial Organs

Itsuo Akasaki
Toyoshi Yoshida
Quality Assurance & Regulatory
Compliance Headquarters

Kenju Fujita
Domestic Division; Pharmaceutical Sales &Marketing Headquarters; Deputy General
Manager, Business Strategy OfficeJun. 2002 :	President and Representative
Director, MEDY HOPE Corporation(to present)
Jun. 2014 :	Appointed Director,
Nipro Corporation (to present)

Jun. 1999 :	Executive Officer of JapaneseNursing Association
Apr. 2002 :	Manager of Nursing Division andAssistant to Director of Kyoto
University Hospital
Apr. 2007 :	Professor of Keio University Facultyof Nursing And Medical Care
Jun. 2010 :	President of Tokyo Nursing
Association
Apr. 2016 :	Professor of Institute for Biomedical
Sciences of Iwate Medical University
Apr. 2017 :	Professor and Dean of School of
Nursing of Iwate Medical University
Apr. 2021 :	Professor Emeritus of Iwate Medical
University (to present)

Kouki Hatakeyama

Jun. 2021 :	Appointed Director,
Nipro Corporation (to present)

Global Production Division; Quality Assurance
Department

Toshiya Kai
Pharmaceutical Division; Pharmaceutical
Research Laboratories

PharmaPackaging Division

PharmaPackaging Division; Sales & Marketing
Headquarters

Tsuyoshi Yamazaki

Outside Directors

Goichi Miyazumi

Audit & Supervisory Board Member (Full-time)

Takayuki Nomiya

Deputy Division Manager Global Business
Division; Global Administration Headquarters

Kaname Sadahiro
Medical Technology Division for Planning,
Development & Marketing; Global ProductDevelopment and Sales Headquarters;
Dialysis and Blood Purification ProductDevelopment and Sales Department

Audit & Supervisory Board Members (Outside)

Kazumichi Irie
Masayoshi Hasegawa

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

25● Financial Review● Ten-Year Summary● Consolidated Balance Sheets● Consolidated Statements of Income

Financial/Data Section● Consolidated Statements of Comprehensive Income● Consolidated Statements of Changes in Equity● Consolidated Statements of Cash Flows● Notes to Consolidated Financial Statements● Corporate Information

Financial Review

Overview

Selling, General and Administrative Expense

In the consolidated fiscal year under review, the demand for some clinicalSelling, general and administrative expenses increased by 3.2% compared withdepartment products and pharmaceuticals declined due to the suppression of

the previous fiscal year to ¥111,212 million (US$1004.5 million). This is mainly due

outpatient clinics and the postponement of surgery caused by the spread of theto higher labor costs and Research and Development expenses.

COVID-19 virus, and sales growth was constrained. On the other hand, consolidated sales increased through steady sales of dialysis-related products, which

Operating Income

are relatively unaffected the spread of infectious diseases, and increased

As a result of the aforementioned factors, operating income was up by 4.6%

demand for vaccine-related pharmaceutical containers and medical devices.

compared with the previous fiscal year to ¥27,627 million (US$249.5 million).

In addition, gross profit improved through greater sales and reduced

The ratio of operating income to net sales increased by 0.1% percentage point tomanufacturing costs, etc., and as we restricted our activity due to the spread of

6.1%.

(Years ended March 31)

Net sales

359,699

2017(Millions of yen)

395,3972018

426,399 442,516

455,559

2019

2021

2020

COVID-19, selling expenses decreased and profits increased.

Other Income (Expenses)
Consolidated Business Results

Other expenses came to ¥8,187 million (US$73.9 million), which is ¥28,392

Relevant quantitative data for the period under review has been converted at themillion lower compared with other expenses in the previous fiscal year. One

rate of US$1.00 = ¥110.71 (rate of exchange as of March 31, 2021).

major factor for the current fiscal year was that a valuation loss on investment

Operating income
28,77027,08823,827(Millions of yen)

26,420 27,627

securities of ¥29,888 million (US$269.9 million) that had been recorded the

Net Sales

previous fiscal yearwas not recorded.

Sales for the current term were ¥455,559 million (US$4,114.8 million). Sales
increased 2.9% YoY.

Income before Income Taxes
As a result of the factors outlined above, income before income taxes was

Cost of Sales¥17,519 million (US$158.2 million), compared to ¥-10,158 million in the previous

The cost of sales increased 2.7% compared with the previous fiscal year tofiscal year.

¥316,718 million (US$2,860.7 million). This rise corresponded to the increase in
net sales. The ratio of cost of sales to net sales decreased by 0.2 percentage

Income Taxes

points compared with the previous fiscal year to 69.5%.

Income tax including deferred taxes increased by 73.1% compared with the

As a result, gross profit increased by 3.4% compared with the previous fiscal

2017

2018

2019

2020

2021

Income before income taxes (Millions of yen)
18,324

17,026

21,233previous fiscal year to ¥2,481 million (US$22.4 million).

17,519-10,158

year to ¥138,840 million (US$1,254.0 million).

2017

2018

2019

2020

2021

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

26● Financial Review● Ten-Year Summary● Consolidated Balance Sheets● Consolidated Statements of Income

Financial/Data Section● Consolidated Statements of Comprehensive Income● Consolidated Statements of Changes in Equity● Consolidated Statements of Cash Flows● Notes to Consolidated Financial Statements● Corporate Information

Financial Review

Net Income (Loss) Attributable to Non-controlling Interests

Asia

Net income attributable to non-controlling interests amounted to ¥828 million

In Asia, sales increased 2.4% YoY to ¥61,275 million (US$553.4 million) due to(US$7.4 million).

greater sales in the Medical-Related business. Among them, sales in China
increased 5.6% YoY to 23,318 million yen (US$210.6 million).

Net Income Attributable to Owners of the Parent(Years ended March 31)

Net income attributable toowners of the parent
11,346

Net income attributable to owners of the parent was ¥14,209 million (US$128.3

Financial Position

million), compared to net loss attributable to owners of the parent of ¥12,281

Total assets increased ¥22,531 million YoY to ¥854,396 million (US$7,717.4

million in the previous fiscal year. Basic earnings per share increased to ¥87.1

million). Current assets decreased ¥11,661 million and noncurrent assets(US$0.8) from ¥-75.3 in the previous fiscal year. Return on equity increased toincreased ¥34,192 million. The decrease of current assets was due to a

9.2% from -7.9% for the previous fiscal year.

decrease of ¥11,941 million in trade notes and accounts receivable and11,829(Millions of yen)

14,20912,136-12,281

2017

2018

2019

2020

2021

the increase in noncurrent assets was due to decrease of ¥15,849 million in

Net Sales by Geographic Segment
Japanproperty, plant and equipment.
Total liabilities increased ¥9,715 million YoY to ¥680,343 million

In Japan, net sales increased by 1.1% compared with the previous fiscal year to(US$6,145.2 million). Current liabilities decreased ¥17,902 million and¥270,543 million (US$2,443.7 million) mainly thanks to the increase of sales in

noncurrent liabilities grew ¥27,617 million. The main reason for the decrease

the Medical-Related business.

in current liabilities was an increase of ¥25,000 million in the current portion

Capital investment
53,826(Millions of yen)

57,71856,276 57,865

2018

2019

51,982of convertible bonds and the primary reason for the increase in noncurrent
Americasliabilities was a ¥48,400 million rise in non-current corporate bonds.

In the Americas, net sales increased by 11.6% compared with the previous fiscal

Total net assets grew ¥12,816 million YoY to ¥174,053 million (US$1,572.1

year to ¥71,572 million (US$646.4 million) mainly thanks to the rise of sales in the

million). Shareholders' equity increased by ¥12,636 million and accumulated

Medical-Related business.

other comprehensive income rose by ¥395 million.
As a result, the equity ratio decreased by 0.9 of a percentage point compared

Europewith the end of the previous fiscal year to 18.8%.

2017

Total assets

2020

2021

(Millions of yen)

In Europe, net sales increased by 2.7% compared with the previous fiscal year to¥52,167 million (US$471.2 million).

752,8392017

826,447 845,821 831,865 854,396

2018

2019

2020

2021

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

27● Financial Review● Ten-Year Summary● Consolidated Balance Sheets● Consolidated Statements of Income

Financial/Data Section● Consolidated Statements of Comprehensive Income● Consolidated Statements of Changes in Equity● Consolidated Statements of Cash Flows● Notes to Consolidated Financial Statements● Corporate Information

Financial Review

Cash Flow

Risk Factors

Net cash provided by operating activities amounted to ¥66,093 million

The following are risks that may have an effect on the Nipro Group's operational(US$596.9 million). The major cash inflows were net income and depreciation

results and/or financial condition. The items concerned were determined as ofand amortization. Net cash used in investing activities came to ¥45,071 million

March 31, 2020.

(US$407.1 million). The principal cash outflow was purchase of property, plantand equipment. Net cash obtained by financing activities amounted to ¥22,062

Nipro Group brings all of its capabilities to bear in ensuring product safety inlong-term loans payable. As a result, cash and cash equivalents stood at ¥85,821

the design, development, and manufacturing of medical devices andmillion (US$775.1 million) as of March 31, 2021.

pharmaceutical products. There are still risks, however, that accidental
defects or adverse effects could result in damages to a third party and our(Millions of yen)

176,408 183,485 171,830

161,237

2017

2020

174,053

2018

2019

2021

being sued for liability.

The total number of employees as of the end of the period under review increased

To cover these risks, we therefore maintain general liability and productby 2,465 compared with the end of the previous fiscal year to 35,251. Employees

liability insurance. In the unlikely event of a successful claim in excess of thein Japan increased by 1,158 to 9,876, and the number of overseas employees

insurance coverage, however, there could be a material adverse effect on ourincreased by 1,307 to 25,375.

operational results and/or financial condition.

Basic Policy on Distribution of Profit

Net assets

(1) Risks Related to Product Safety

million (US$199.2 million). The main account of cash inflow was proceeds from

Staff

(Years ended March 31)

Basic earnings per share
67.5

71.1

Nipro Group procures materials and parts for its operations from a largeof profits as an important management policy. Retained earnings will be actively

number of suppliers. Some key materials or parts may be obtained only frominvested in the research and development division, in addition to the sales divisiona single supplier or a limited group of suppliers. If circumstances at any ofand production division, as a part of efforts to expand the business base andthese suppliers make it impossible for us to acquire a sufficient quantity ofpromote long-term business development. Through these means we will ensurematerials or parts to meet our production needs in a timely and cost-effective

stable profits and achieve continued growth.

manner, there could be a material adverse effect on our operational results

87.1

73.6

-75.3

(2) Risks Related to Supplier Concentration

At Nipro, we have been paying dividends to shareholders by positioning the return

(yen)

2017

2018

2019

2020

Number of employees

(Thousand)and/or financial condition.
27.4

28.3

29.3

2017

2018

2019

2021

32.8

2020

35.2

2021

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

NIPRO Annual Report 2021

Financial/
Data Section

28● Financial Review● Ten-Year Summary● Consolidated Balance Sheets● Consolidated Statements of Income

Financial/Data Section● Consolidated Statements of Comprehensive Income● Consolidated Statements of Changes in Equity● Consolidated Statements of Cash Flows● Notes to Consolidated Financial Statements● Corporate Information

Financial Review(3)	Risks Related to Changes in
Government Healthcare Policies(6) Risks Related to Overseas Expansion
Nipro Group maintains manufacturing bases and sales offices around the

The business sector to which Nipro Group belongs is intimately connectedworld for the production and supply of its products. Should there bewith the healthcare system and is subject to the regulations laid out by

unexpected revisions to legal regulations or political or economic changes

government organizations, including the National Health Insurance

in these countries or regions, there could be a material adverse effect on

System and the Pharmaceutical and Medical Devices Act, formerly known

our operational results and/or financial condition.

(Years ended March 31)

Equity ratio
22.1

20.9

(%)

19.1

17.9

18.8

2019

2020

2021

as the Pharmaceutical Affairs Law. Should circumstances arise in which
we were unable to respond to changes in the environment brought about(7) Risks Related to Intellectual Property

by unforeseeable wholesale changes in government healthcare policies,

Nipro Group owns numerous patents and trademarks, and maintains various

there could be a material adverse effect on our operational results and/or

proprietary rights for the products it manufactures. Additionally, we take all

financial condition.

possible measures to avoid infringing the patents and proprietary rights ofany third party, and to avoid breaching any license agreements we have(4) Risks Related to Changes in Sale Prices

concluded concerning technologies. Nevertheless, if an unanticipated

The products sold by Nipro Group include some that are affected on an

claim for damages were to be made by a third party and the defense of theirregular two-year basis by price reductions under the Japanese paymentgroup were to be rejected, there could be a material adverse effect on its

system for medical care, drug prices, and reimbursement prices for medical

operational results and/or financial condition.

2017

2018

Return on assets
1.6

1.5

(%)

-1.5

materials and supplies. Moreover, should measures to hold down medical
costs also become pervasive worldwide, resulting in intensified competition(8) Risks Related to Environmental Regulations

between corporations and leading to prices falling to a greater degree thanNipro Group believes it has taken adequate precautions to comply with

anticipated, there could be a material adverse effect on our operational

applicable regulations in the course of its business activities. Should our

results and/or financial condition.

activities cause an unforeseen environmental problem, however, with aclaim for damages made against us, there could be a material adverse(5) Risks Related to Changes in Prices of Raw Materials

effect on our operational results and/or financial condition.

The products manufactured by Nipro Group include some that are made frompetrochemical products such as plastics. Should the cost of raw materials

1.7

1.5

(9) Risks Related to Exchange Rate Fluctuations

such as petrochemicals rise, there could be a material adverse effect on our

Nipro Group, including its overseas subsidiaries, carries out its foreign

operational results and/or financial condition.

currency transactions primarily in US dollars and euros, but calculates

2017

2018

2019

2020

2021

Return on equity
6.8

7.0

(%)

9.2

7.3

-7.9

financial statements for its overseas subsidiaries using Japanese yen for
2017

2018

2019

2020

2021

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Financial/
Data Section● Financial Review● Ten-Year Summary● Consolidated Balance Sheets● Consolidated Statements of Income

Financial/Data Section

NIPRO Annual Report 2021

29
● Consolidated Statements of Comprehensive Income● Consolidated Statements of Changes in Equity● Consolidated Statements of Cash Flows● Notes to Consolidated Financial Statements● Corporate Information

Financial Review

the purpose of producing consolidated financial statements. Fluctuations in exchange rates may
therefore have a material adverse effect on our operational results and/or financial condition.

(13) Risks Related to M&A and Business Alliances
Nipro Group conducts M&A activities and enters into business alliances to reinforce its businessbase. Prior to concluding these deals, we carry out a thorough investigation of the target company.

(10) Risks Related to Investment Value

However, should any problems arise such as the discovery of unrecognized liabilities or should the

Nipro Group’s assets include investments in stocks and other securities. These investments

development of the acquired business not proceed as planned, there could be a material adverse

have been made for purposes such as building good business relationships with the issuers ofeffect on our operational results and/or financial condition.

such securities, or for gathering useful information for the development of new products or new
business opportunities. Should the value of these investments decline significantly owing to(14) Other Risks

fluctuations in the stock market, circumstances at an issuer, or a change in the accounting

Fires, earthquakes, acts of terrorism, wars, epidemics, or other unforeseen man-made or natural

methods used to deal with these investments, there could be a material adverse effect on ourdisasters affecting areas or facilities where Nipro Group conducts its business activities may cause

operational results and/or financial condition.

a delay or interruption in production, sales, distribution, or provision of services. Should such adelay or interruption be extended, there could be a material adverse effect on our operational(11) Risks Related to Controls on Personal Information

results and/or financial condition.

Nipro Group has established strict precautions to protect the confidentiality of personal informationin our possession. However, if due to unforeseen events or an accident this personal information is(15) Risks Related to Coronavirus Spread

leaked outside the group, causing a loss of trust or customers, there could be a material adverse

An abnormal situation such as the spread of a novel coronavirus infection or a natural disaster

effect on our operational results and/or financial condition.

could occur on a scale beyond our expectations. Should such an event occur, production bases
could close, logistics could be interrupted, and business operations with major customers could(12) Risks Related to Fundraising

become difficult, which will affect our financial condition and business results. Hygiene

Nipro Group relies on debt finance in the form of loans from financial institutions or issuancemanagement, telecommuting (remote work), staggered working hours, and web meetings asof corporate bonds and commercial paper, etc., to raise business and investment funds. If due

measures to prevent the spread of a novel coronavirus infection may have to be implemented.

to turmoil in financial markets there is a reduction in lending from financial institutions or a

Nipro Group will also make every effort to introduce the wearing of masks at meetings.

significant downgrade of our credit rating by credit rating agencies, we may not be able to raise
the necessary funds when we need them on acceptable terms. At the same time, we may incur
restrictions on our fundraising capabilities or see an increase in the cost of fundraising. Any ofthese occurrences could have a material adverse effect on our operational results and/or
financial condition.

Contents
Contents

Management
Management
Message
Message

About
About NIPRO
NIPRO

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

30

●
inancial Review● FFinancial
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

Ten-Year Summary●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows
otes to
●
● N
Notes
to Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31
Thousands of
U.S. dollars (Note 1)

Millions of yen

Income Statement Data:
Net sales

Medical-Related (*1)

2021

¥

2020

455,559

347,648¥

68,564

Pharmaceutical-Related (*1)

335,767¥2018

426,399

327,359¥

63,482

36,217691

Other (*1)

442,516

70,35738,655

PharmaPackaging (*1)

2019395,397

300,117¥

66,84635,526174

2017359,699

262,198¥

69,14028,40431

2016

366,650

272,167¥

62,26628,331

29

2015

325,084

237,777¥

57,37232,18429

2014

300,753

221,363¥

51,50829,830

32

2013

104

241,020

169,971¥

66,212

27,611

4,603

271

2021

2012

235

212,013$4,114,886

59,715619,313145,082

3,140,170

6,954

349,159

262

6,242

Cost of sales

316,718

308,304

295,767

268,272

244,602250,773

225,525

213,220

175,314149,253

2,860,797

Operating profit

27,627

26,42023,82727,08828,77024,204

16,571

12,28911,37015,825249,545

4,940

90,980111,212Selling, general and administrative expenses

107,791

39,415

Medical-Related (*2)

36,24910,072

Pharmaceutical-Related (*2)

61

54,336

20,436

10,553(1,618)(10)

75,242

23,813

12,060(1,313)75

82,98728,204

14,135(1,308)146

91,671

30,638

13,104778

176

86,32636,522

10,662

675

376

Other (*2)

100,036

36,722

13,196

1,992

PharmaPackaging (*2)

106,804

14,287

8,013(2,889)(2,183)

131

3,988

601

216

222

46,934

1,004,542

17,078356,023454

17,997
158,244

230

3,401

Profit before income taxes

17,519(10,158)

21,23317,02618,324

26,284

19,90812,891

18,05811,022

Increase in tangible and intangible fixed assets

78,86164,67064,394

61,99058,31057,10147,69835,09337,99739,525712,326

R&D expenses

18,652

18,204

16,526

16,113

11,517

10,269

8,645

7,891

6,464

14,209Profit attributable to owners of the parent

39,849Depreciation and amortization

Balance Sheet Data:
Total assets

Property, plant and equipment—net
Working capital

Current liabilities

Non-current liabilities
Share capital

Capital surplus
Net assets(12,281)¥854,396335,906

149,866
271,501

408,841

84,397

4

174,053

12,136

38,682¥

831,865

307,551

143,626
289,404

381,223

84,397

5

161,237

11,82935,252¥845,821284,483

168,675
274,277

399,71284,397—

171,830

11,34632,565¥

826,447

270,273

184,861
251,186

392,087

84,397—

183,485

19,71831,128¥752,839244,222

134,983
251,792

324,639

84,397—

176,408

12,47030,147¥

708,882

223,756

115,970

2,861

27,667¥695,306

220,195

71,945

10,231

25,151¥

619,654

191,593

45,405

21,209¥579,302174,70374,216¥

4,586

128,349

21,581359,941

5,956

168,482499,687$7,717,431

61,346

1,353,687

196,646

3,692,905

145,679

3,034,113

252,147

278,402250,714

213,758

189,090

2,452,370

84,39784,39784,39784,39784,397762,332

113,951

1,572,156

281,227—

175,507

238,095

635

178,810

232,979688

135,960

236,781636

128,763636

38(*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 and Related Information” (March 27, 2009) and ASBJ Guidance No. 20 “Guidance on Accounting Standard forDisclosures about Segment of an Enterprise and Related Information” (March 21, 2008). 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 businesses. As a result of this reorganization, some business divisions included in Glass-Related business were changed to Pharmaceutical-Related business. The segment information is presented as if the aforementioned
reorganization had been conducted at the beginning of the financial year 2012, and the presentation for the prior financial years are not restated. Also, effective on the half year ended September 30, 2014, 13 subsidiaries including Nipro Glass France S.A.S., Nipro Glass Belgium
N.V., Nipro Glass Germany AG, Nipro Sterile Glass Germany AG, and Nipro Glass Americas Corporation were reclassified from Medical-Related Business to PharmaPackaging-related Bussiness, which was formerly known as Glass-Related Business by the corporate reorganization.
Segment information after 2014 is based on this reclassification.
From fiscal year ended March 31, 2019, the Company has conducted reorganization for the purpose of doing synthetic PharmaPackaging business and increasing synergy for Pharmaceutical-Related business. As a result of this reorganization, some business divisions includedin Pharmaceutical-Related business were changed to PharmaPackaging business. The presentations for prior fiscal years are not restated.
(*2) Operating profit at the operating segment level is not adjusted for intra-segment transactions. See Note 14. “Segment Reporting” to the consolidated financial statements.

Contents
Contents

Management
Management
Message
Message

About
About NIPRO
NIPRO

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

31

●
inancial Review● FFinancial
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows
otes to
●
● N
Notes
to Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Ten-Year Summary

Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31

U.S. dollars(Note 1)Yen

Per Share Data:

Basic earnings (*3)

Diluted earnings (*3)
Cash dividends

2021

¥

2020

87.1

—

28.0

¥

2019

(75.3)
—

13.5

¥

2018

73.6

66.7

28.0

¥

2017

71.1

64.5

28.5

¥

2016

67.5

61.3

29.0

¥

2015

116.2

114.7

33.5

¥

2014

81.0
—

32.5

¥

2013

18.2

16.3

30.5

¥

2021

2012

60.0

54.1

27.5

¥

35.3

31.0

23.5

987.3

912.2

990.1

1,037.2

999.5

977.6

988.8

832.1

703.5

643.9

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

171,459,479

Equity ratio (*4) (%)

18.8

17.9

19.1

20.9

22.1

23.4

24.1

20.2

20.7

22.0

Return on equity (*4) (%)

9.2

(7.9)

7.3

7.0

6.8

11.8

8.5

2.3

8.9

Equity (*3)

Number of common shares issued
Number of employees

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

35,251

1.7

15.3

32,786(1.5)—

29,325

1.5

19.3

28,3301.5

21.6

27,415

1.6

23.2

24,2432.8

9.2

23,1531.9

14.1

21,8260.5

50.9

19,327

1.9

13.9

$

0.79
—
0.25
8.91

14,566

0.9
4.2

17.4

(*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 split one share of common stock into two shares on October 1, 2011 based on a resolution at the board of directors’ meeting held on August 27, 2011. In accordance with thisadoption, equity per share, basic earnings per share and diluted earnings per share are calculated on the assumption that the two-for-one stock split of common stock was conducted at the beginning of the 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 the total shareholders’ equity and accumulated other comprehensive income to total assets at the period end. Return on assets is the ratio of profit attributable to owners of the parent 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. The price earnings ratio is the ratio of the closing price of the Company’s shares listed on the First Sectionof the Tokyo Stock Exchange on the last trading day in March of each year to the basic earnings per share.
(*5) Until 2016, yen amounts are rounded to the nearest million yen. Since 2017, yen amounts are rounded down to the nearest million yen.

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

32

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●● Consolidated
Consolidated Balance
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

Consolidated Balance Sheets●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows
otes to
●
● N
Notes
to Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Nipro Corporation and its Consolidated Subsidiaries
As of March 31, 2021 and 2020

Thousands of
U.S. dollars (Note 1)

Millions of yen

2021

2021

2020

¥ 85,821¥ 90,154

Notes and accounts receivable—trade140,521

152,462

1,269,272

Inventories (Note 3)

164,221

153,280

1,483,345

421,368

433,030

3,806,057

AssetsCurrent assets:

Cash and cash equivalents

Time deposits (over three months)
Allowance for doubtful accounts
Other current assets

Total current assets

4,452(1,182)

27,534$

5,771

775,196
40,216(1,137)(10,677)

32,498

248,705

Liabilities and net assets
Current liabilities:

Short-term borrowings (Notes 5 and 9)

Current portion of long-term borrowings (Notes 5 and 9)
Notes and accounts payable—trade
Income taxes payable

Land

Buildings and structures

Machinery and equipment
Construction in progress

Accumulated depreciation

Property, plant and equipment—net¥ 52,100¥ 47,004

403,998

376,576

247,413

42,199745,712(409,806)
335,906

470,605

241,755

2,234,788

27,644

381,175

692,980(385,429)

3,649,161
6,735,730(3,701,617)

307,551

3,034,113

Goodwill

Other intangible assets

Total intangible assets¥ 14,738

29,80333,401

16,238$18,663

122,528
146,674
269,203

Shares of subsidiaries and associates
Investment securities (Note 6)
Leasehold deposits

Deferred tax assets
Other assets

Total investments and other assets

Total

The accompanying notes are an integral part of these statements.

¥ 15,743

31,463

2,593

12,077

5,439

67,318¥ 854,396¥ 13,836

142,20725,464284,195

12,670109,094

1,832
4,078

57,882¥ 831,865

23,42849,131
608,057$ 7,717,431$ 447,442

67,21969,539607,165
323,286

2,413

90,9382,999—

Non-current liabilities:

Long-term borrowings (Notes 5 and 9)

Provision for retirement benefits (Note 10)

Deferred tax liabilities (Note 4)

Other non-current liabilities

Total non-current liabilities

12,59916,564

777,263
21,79813,893

113,803

15,167

149,622

11,988271,501

289,404

2,452,370¥370,190¥360,456$3,343,789

215

228

5,846

32,5886,421

52,812

14,117294,357

1,945

408,841

381,223

3,692,905¥ 84,397¥ 84,397$ 762,332

Commitments and contingent liabilities (Note 11)
Net Assets (Note 12):

Issued: 171,459,479 shares

Capital surplus

Retained earnings

4

87,326

5

38788,789(10,748)

74,768(10,827)(97,084)

160,980

148,344

1,454,076

Valuation difference on available-for-sale securities

9,080

731

82,020Foreign currency translation adjustments(9,321)

341(84,193)

Less treasury shares(8,362,196 shares in 2020 and 8,361,856 shares in 2019)$¥ 71,078

86,0501,327

Total shareholders’ equity
Investments and other assets:¥ 49,536

Provision for loss on disaster

Notes and accounts payable—facilities

Authorized: 400,000,000 shares¥ 13,565

2021

25,787

Share capital

Intangible assets (Note 5):2020

35,791Other current liabilities

$

2021

Accrued expenses

Total current liabilities

Property, plant and equipment (Note 5):

Thousands of
U.S. dollars (Note 1)

Millions of yen

Deferred gains or losses on hedges

Remeasurements of defined benefit plans

Accumulated other comprehensive income

Non-controlling interests
Total net assets

Total

The accompanying notes are an integral part of these statements.

(34)

(69)

(307)

319

(563)

2,889

13,027

12,452

117,67045

174,053¥854,396440

161,237¥831,865

409
1,572,156$7,717,431

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

33

●
inancial Review● FFinancial
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheets●● Consolidated
Consolidated Statements
Statements ofof Income
Income●● Consolidated
Consolidated Statements
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows
otes to
●
● N
Notes
to Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Financial/Data Section

Financial/Data Section

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020
Thousands of
U.S. dollars (Note 1)

Millions of yen

Net sales

Cost of sales

Gross profit

2021$4,114,886

138,840

134,2111,254,088

107,791

1,004,542

316,718

27,627

Other income (expenses):
Interest expense

Loss on sale and disposal of property, plant andequipment—net
Foreign exchange gain (loss)

Share of profit of entities accounted for using equity
methodGain on sales of investment securities

(985)

(152)

(8,898)857(2,999)

7,748

(546)

89

(4,936)

1,761

3,607

15,913(1,920)6,237

Current

DeferredProfitDiluted earnings

Cash dividends

The accompanying notes are an integral part of these statements.

(12,984)—(17,350)(10,158)

158,244—(702)

17,519

Income taxes (Note 4):(5,655)(29,888)(5,838)Other income (loss)—net

18,106(36,161)

Reversal of provision for loss of disaster

Basic earnings

2,575

—

(52,738)

5,343

56,339(3,756)(3,910)(33,927)

15,038(11,592)

135,832828

689¥ 14,209¥ (12,281)

7,483$ 128,349
U.S. dollars(Note 1)

Yen

¥

87.1

—

28.0

¥

(75.3)—

13.5

Profit

$

0.8
—
0.2

2021

2020

2021

¥15,038¥(11,592)$135,832

Valuation difference on available-for-sale securities

8,348

5,904

75,412Foreign currency translation adjustment(9,039)(2,688)(81,648)

(367)

8,042

(436)

(93)

(3,941)

Comprehensive income¥14,837¥ (8,852)$134,016

Owners of parent

13,814(9,039)124,781

Other comprehensive income:Deferred gains or losses on hedges

Remeasurements of defined benefit plans

Share of other comprehensive income of entities
accounted for using equity method(3,454)(1,437)

Profit before income taxes

249,545(4,003)

Impairment loss (Note 17)

Loss on valuation of investment securities (Note 6)

2,860,797

26,4202,004Interest and dividend income

Amounts per common share:

308,304

111,212

Operating profit

Profit attributable to owners of the parent

2021¥442,516

Selling, general and administrative expenses (Notes 15 and 16)

Profit (loss) attributable to non-controlling interests

2020¥455,559

Thousands of
U.S. dollars (Note 1)

Millions of yen

Comprehensive income attributable to:Non-controlling interests

The accompanying notes are an integral part of these statements.

35

890

1,022

(14)

187

318

9,235

Contents
Contents

Management
Management
Message
Message

About
About NIPRO
NIPRO

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

34

●
inancial Review● FFinancial
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

Consolidated Statements of Changes in Equity●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Income●● Consolidated
Consolidated Statements
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows
otes to
●
● N
Notes
to Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020 consisted of the following:Thousands

Balance at March 31, 2019

Outstanding
number ofshares ofcommon share

171,459

Profit attributable to owners of the parent

Millions of yen
Sharecapital¥84,397

Capitalsurplus—

Increase (decrease) in retained earnings due toinclusion of new subsidiaries in consolidation
Dividends of surplus

Purchase of treasury shares
Disposal of treasury shares

Retainedearnings

Treasuryshares¥ 90,719¥(10,826)¥164,291(3,669)—(3,669)00(12,281)(0)(0)

Other net change during the year

171,459

Balance at March 31, 2020

Profit attributable to owners of the parent¥84,397¥5
5

Increase (decrease) in retained earnings due toinclusion of new subsidiaries in consolidation

Total
shareholders’equity¥ 74,768

14,209¥(10,827)

147(1,718)Dividends of surplus

Purchase of treasury shares

Disposal of treasury shares

Other net change during the year

171,459

Balance at March 31, 2021

¥84,397

(0)

(79)

¥4

¥ 87,326

(698)
776

¥(10,748)(12,281)

Balance at March 31, 2020

171,459¥(5,173)

Deferred
gains orlosses onhedges¥(54)

Foreigncurrencytranslation
adjustments¥ 2,625

Remeasurementsof defined
benefit plans¥(199)

Accumulated
other comprehensive
income¥(2,802)

Noncontrollinginterests

Total
net assets¥10,341¥148,344

14,209¥171,830(12,281)(3,669)

(0)

(0)

5,905
¥ 731

(14)
¥(69)

(2,284)
¥ 341

(364)
¥(563)

3,242
¥ 440

2,111
¥12,452

0

5,353¥161,237
14,209147

147(1,718)(1,718)(698)
697¥160,980

Thousands
Outstanding
number ofshares ofcommon share

Valuationdifference on
available-for-salesecurities

(698)

8,348
¥ 9,08035¥(34)(9,662)¥(9,321)

883
¥ 319

(395)
¥
45

574
¥13,027

697

179¥174,053

Thousands of U.S. dollars (Note 1)
Sharecapital$762

Capitalsurplus$0

Retainedearnings

Treasuryshares$675

Valuationdifference on
available-for-salesecurities

Total
shareholders’equity$(98)

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustments

Remeasurementsof defined
benefit plans

Accumulated
other comprehensive
incomeNoncontrollinginterests

Total
net assets$1,340

$ 7

$(1)

$ 3

$(5)

$4

$112

$1,456

128

0

0

0

0

0

0

128

Profit attributable to owners of the parent

128
1

1

1

Dividends of surplus

(16)

(16)

(16)

(6)

(6)

(6)

7

6

Increase (decrease) in retained earnings due toinclusion of new subsidiaries in consolidation
Purchase of treasury shares

Disposal of treasury shares

Other net change during the year

Balance at March 31, 2021

The accompanying notes are an integral part of these statements.

(0)
171,459

$762

$0

(1)
$789

$(97)

$1,454

75
$82

0
$(0)

(87)
$(84)

8
$3

(4)
$0

5
$118

6
2
$1,572

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

35

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

Consolidated Statements of Cash Flows●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●● Consolidated
Consolidated Statements
Statements ofof CashCash Flows
Flows
otes to
●
● N
Notes
to Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2021 and 2020

Thousands of
U.S. dollars (Note 1)

Millions of yen

2021

2020

2021

¥ 17,519¥(10,158)$ 158,244

1,437

5,655

12,984

546

Increase in allowance for doubtful accounts

3,275

Gain on sales of investment securities(1,441)

National subsidies(1,002)

Operating activities:

Profit before income taxes

Depreciation and amortization
Impairment loss

Amortization of goodwill

Share of profit (loss) of entities accounted for using equity
methodForeign exchange gains

Loss on valuation of investment securities

Loss on tax purpose reduction entry of non-current assets

Gain on bargain purchase

Increase (decrease) in trade receivables

39,849

2,777

1,544

38,682359,941

3,143

25,091

(89)

4,936

242

29,582(3,123)(13,019)(898)(9,057)

(27)

—

1,651

13,94979

29,892

805

852

7,276

(2,652)

95,096—

10,528721

Decrease in inventories(12,850)(15,241)(116,075)

Decrease (increase) in other assets(5,395)

1,258(48,733)

Income taxes paid

(4,207)(9,108)(38,007)

66,09337,246596,998

Deposit (Over three months)

1,224

3,168

11,059Proceeds from sales of investment securities

7,629

8,884

68,911(1,507)(4,243)(13,618)

Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation(1,936)(5,684)

17,487Purchases of property, plant and equipment(51,182)(57,943)(462,309)(934)(3,249)(8,439)Decrease (increase) in trade payables

Increase (decrease) in other liabilities
Other, net

Net cash provided by operating activities

Investing activities:

Purchase of investment securities

Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments for acquisition of businesses

Proceeds from sales of property, plant and equipment
Other, net

Net cash used in investing activities

(567)

9,187

4,009

(100)

(868)
735

(45,071)205(5,011)
1,973

(67)

—

861

(58,272)(5,130)82,98336,213(907)(7,843)6,640(407,116)

Thousands of
U.S. dollars (Note 1)

Millions of yen

2021

2020

2021

Net increase (decrease) in short-term borrowings¥(21,698)¥ 18,642$(195,995)

Repayments of long-term borrowings(65,399)(96,052)(590,728)

Repayment of bonds(26,600)(3,900)(240,267)(8)(6,313)Financing activities:

Proceeds from long-term borrowings
Proceed from issuance of bonds

Proceeds from sales of treasury stock

Purchase of treasury stock
Cash dividends paid
Other, net

Net cash provided by financing activities

47,08049,272697(699)

61,89017,9120425,257
445,058
6,303(1,744)(3,773)(22,062)(4,566)(199,286)(4,563)(40,441)(2,972)723(15,753)(26,845)

Effect of exchange rate changes on cash and cash equivalents(4,477)

Cash and cash equivalents, beginning of period

90,154

120,310814,326

1,186—

10,716¥ 85,821¥ 90,154$ 775,196

Net increase (decrease) in cash and cash equivalents

Increase in cash and cash equivalents resulting from
inclusion of subsidiaries in consolidation
Cash and cash equivalents, end of period

The accompanying notes are an integral part of these statements.

(5,518)(30,156)(49,847)

Contents
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About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan
Management Plan

Reviewof
Review ofOperations
Operations

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
SectionData●● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

Notes to Consolidated Financial Statements
1. Basis of Presenting Consolidated Financial Statements(a) Basis of Consolidation

related accounting regulations, and in conformity with accounting principles generally accepted in Japan, which areaffiliated company accounted for by the equity method.

different in certain respects as to application and disclosure requirements of International Financial Reporting36●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

2. Summary of Significant Accounting Policies

The financial statements of Nipro Corporation (“the Company”) and its consolidated domestic subsidiaries have been
prepared in accordance with the provisions set forth in the Financial Instruments and Exchange Law of Japan and its

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

The consolidated financial statements include the accounts of the Company and the significant subsidiaries andInvestments in unconsolidated subsidiaries are stated at cost and the equity method is not applied for the valuation

Standards. Effective from the year ended March 31, 2009, the Company has adopted the “Practical Solution onof such investments since they are considered immaterial in the aggregate.

and as a result, the accounts of consolidated overseas subsidiaries are prepared in accordance with either International

profits included in assets resulting from transactions within the Company and its consolidated subsidiaries have been

the specified four items as applicable.

assets at the dates of acquisition is amortized on a straight-line basis over five to 20 years.

Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (PITF No. 18)
Financial Reporting Standards or generally accepted accounting principles in the United States, with adjustments for

In preparing the accompanying consolidated financial statements, certain reclassifications have been made to the

All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized

eliminated. The difference between the cost of investments in subsidiaries and affiliates and the equity in their net
All accounts herein have been presented on the basis of the 12 months ended March 31, 2021 for the Company andconsolidated financial statements issued domestically, in order to present them in a form which is more familiar tofor consolidated domestic subsidiaries, and December 31, 2020 for all consolidated overseas subsidiaries.

results of operations presented in the original financial statements. In addition, the notes to consolidated financial

between the end of the accounting period of the consolidated overseas subsidiaries and that of the Company.

practices in Japan.

(b) Translation of Foreign Currencies

reader, have been translated into United States dollars at the rate of ¥108.83 = US$1, the approximate exchange rate

as of the balance sheet date except for shareholders’ equity, which is translated at the historical rates. Income

readers outside Japan. However, no adjustment has been made which would change the financial position or thestatements include additional information which is not required under generally accepted accounting principles and
The financial statements presented herein are expressed in Japanese yen and, solely for the convenience of theon March 31, 2021. 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.

In preparing the accompanying consolidated financial statements and notes, Japanese yen figures of less than one

million yen have been rounded down to the nearest million yen, in accordance with the Financial Instruments andExchange Law and Enforcement Ordinance concerning the Banking Law of Japan, although the figure of the past fiscal
years before fiscal 2016 were rounded in this report.

Therefore, total or subtotal amounts shown in the accompanying consolidated financial statements and notes

thereto are not necessarily equal to sums of individual amounts.

Adjustments have been made for any significant intercompany transactions which took place during the period

Balance sheets of consolidated overseas subsidiaries are translated into Japanese yen at the current exchange rates
statements of consolidated overseas subsidiaries are translated into Japanese yen at the average exchange rates forthe period. Resulting translation adjustments are shown as “Foreign currency translation adjustments” in the“Accumulated other comprehensive 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 investmentswith original maturities of three months or less.
(d) Allowance for Doubtful Receivables

An allowance for possible losses from trade notes and accounts receivable, loans and other receivables is provided
based on the actual rate of past bad debts and the uncollectible amounts of certain individual receivables.
(e) Inventories

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

Contents
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About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan
Management Plan

Reviewof
Review ofOperations
Operations

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
SectionData●● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

37
●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements(f) Property, Plant and Equipment

Depreciation of property, plant and equipment of the Company and its consolidated domestic subsidiaries is computed

principally by the declining-balance method. The straight-line method is applied to buildings acquired by the domestic
companies after April 1, 1998 and buildings and accompanying facilities and structures acquired by the domestic

companies after April 1, 2016, and is principally applied to the property, plant and equipment of consolidated overseas
subsidiaries.

(g) Intangible Assets

Amortization of intangible assets, including software for the Company’s own use, is computed by the straight-line
method over the estimated useful life of the asset.

Goodwill is amortized on a straight-line basis over the period the Company benefits from its use. If the amount is

not significant, it is expensed 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 tohold to maturity, are stated at amortized cost.

ii) available-for-sale securities, which are not classified as the aforementioned 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 acharge to income.

Actuarial gains and losses are amortized on a straight-line basis over a certain period (mainly 5 years) which iswithin the average of the estimated remaining service years of the employees commencing from the following year inwhich they arise.

Some consolidated subsidiaries amortize their actuarial gains and losses all at once in the fiscal year in which theyarise.

(k) Derivatives

Derivatives are stated at fair value, with changes in fair value included in net income or loss for the period in which theyarise, 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 leaseassets is calculated by the straight-line method over the lease period assuming no residual value.

The Company and its consolidated domestic subsidiaries account for 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 an“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 swaps
and the exceptional accounting method is applied to interest rate swaps when certain hedging criteria are met.

<Hedge instrument and hedge items>(Hedging instruments)
Interest rate swap

(Hedged items)

Interest on short-term and long-term debt(i) Allowance for Loss on Clearance of Business<Hedge policy>

is provided.

<Method for assessing hedge effectiveness>

The Company has withdrawn from retail business and a provision for anticipated losses of sales of related fixed assets(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 Company uses interest rate swaps to reduce interest volatility risk.
Hedge effectiveness is not assessed when substantial items and conditions of hedging instruments and thehedged transactions are the same, and is not assessed when cash flow can be completely offset for a whole hedge
period.

the benefit formula basis.

(n) Income Taxes

Accounting Method of Actuarial Gains and Losses and Prior Service Costs

approach is used to recognize deferred tax assets and liabilities for the future tax consequences of temporary

Prior service costs are amortized on a straight-line basis over a certain period (mainly 5 years) which is within the
average of the estimated remaining service years of the employees when they occur.

The provision for income taxes is computed based on income for financial statement purposes. The asset and liability

differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes.

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

38

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements(o) Amounts per Common Share

Basic earnings per share are computed by dividing net income available to common shareholders by the weighted-

average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilutionthat 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 timeof issuance) with an applicable adjustment for related interest expense, net of tax, and full exercise of outstanding

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 30.6% for the years ended March 31, 2021.
The significant components of deferred tax assets and liabilities were as follows:

Deferred tax assets(p) Accounting Standard Issued but not yet Effective

Accounting Standard for Revenue Recognition and Implementation Guidance on Accounting Standard for
Revenue Recognition

This standard and guidance specifies Revenue Recognition comprehensively. To recognize revenue under thisstandard and guidance, an entity applies the following five steps:
Step 1: To identify the contract(s) with a customer

Step 2: To identify the performance obligations in the contract
Step 3: To determine the transaction price

Step 4: To allocate the transaction price to the performance obligations in the contract

Step 5: To recognize revenue when (or as) the entity satisfies a performance obligation

The Company and its domestic subsidiaries will adopt the guidance effective from the beginning of the fiscal year

ended March 31, 2022. At present, the Company is in the process of evaluating the impact on the consolidated financial

statements of the adoption of Accounting Standard for Revenue Recognition and Implementation Guidance on
Accounting Standard for Revenue Recognition.

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

Millions of yen

Finished goods and merchandise

Raw materials

Work in process

Packing and other
Total

2021

2020

2021

¥113,109¥106,284$1,021,677

14,117

12,418

127,519¥153,280$1,483,345

31,066
5,927¥164,221

29,0095,568

280,608
53,538

Thousands of
U.S. dollars (Note 1)

Millions of yen

warrants.

Tax loss carryforwards
Intercompany profits
Valuation loss on inventories
Allowance for bonuses to employees
Sales allowance
Loss on impairment of fixed assets
Excess of allowance for doubtful accounts over tax
allowable amounts
Net defined benefit liability
Accrued enterprise taxes
Unrealized loss on available-for-sale securities
Goodwill
Loss on liquidation of business
Other

Gross deferred tax assets
Less: Valuation allowance for the Net Operating Loss
Carry Forwards (*2)
Less: Valuation allowance for the deductible temporary
differences
Total Less: Valuation allowance (*1)

Total deferred tax assets
Deferred tax liabilities
Unrealized gain on available-for-sale securities
Revaluation reserve for land
Revaluation reserve for fixed assets—other
Retained earnings on foreign subsidiaries
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities) (*1)

2021

2020

2021

¥ 25,516
2,170
1,720
1,325
400
997

¥ 20,849
1,004
1,379
1,261
394
426

$ 230,477
19,601
15,544
11,973
3,618
9,006

2,030

2,174

18,338

1,599
316
—
—
98
6,307

1,707
243
(1)
—
165
4,006

14,448
2,855
—
—
890
56,96942,38333,450382,834(18,249)(13,893)(164,840)(4,614)(3,927)(41,683)(22,864)(17,821)(206,524)

15,629176,310

4,051
783
460
611
1,749

342
783
439
565
1,057

36,592
7,076
4,163
5,525
15,804

19,5197,656¥ 11,862

3,188¥ 12,441

69,161$ 107,149(*1) In fiscal year ended in 2021, March, Valuation allowance was increased by ¥2,574 million. The main reason of this increase is that
Valuation allowance for the Net Operating Loss Carry Forwards was increased by ¥895 million in Goodman Co., Ltd.
(*2) Balance of the deferred tax assets on the Net Operating Loss Carry Forwards by the expiration year.

Contents
Contents

Management
Management
Message
Message

About
About NIPRO
NIPRO

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

39

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

Reconciliation of the differences between the statutory tax rates and the effective income tax rates was as follows:
2021

30.6%

Statutory tax rate

—%

1.4

Expenses not deductible for tax purposes
Non-taxable dividend income(0.3)

Amortization of goodwill

4.9

—

(6.0)

Tax credits primarily for research and development costs(8.8)

Valuation allowance

0.2

Retained earnings on foreign subsidiaries

2021$ 196,340$ 230,477(2,539)(3,685)(4,965)(3,051)(8,438)(142,115)(164,840)—

Deferred Tax Assets

920

4,120

4,046

1,212

1,112

54,22565,637—

Valuation allowance—(*A) Each Net Operating Loss Carry Forwards amount is multiplied by Statutory tax rate.
(*B) Deferred Tax Asset for Net Operating Loss Carry Forwards (multiplied by Statutory tax rate) for the years ended March 31, 2021
and 2020 were ¥25,516 million (US$203,152 thousand) and ¥20,849 million, respectively. These Deferred Tax Assets were mainly
recognized for the balance of Net Operating Loss Carry Forwards (multiplied by Statutory tax rate)in Nipro Corporation for the year
March 31, 2020 and PT. NIPRO INDONESIA JAYA for 2019, respectively. As a result of tax scheduling, Valuation allowance for this Net
Operating Loss Carry Forwards was not recognized due to assumption that this amount is collectable.

—%

5. Pledged Assets
The following assets were pledged as collateral:

Over 2 years
within3 years

Over 3 years
within4 years

Over 4 years
within5 years

Over 5 years

Total

¥ 383

¥ 864

¥ 997

¥ 472

¥1,062¥ 21,736¥ 25,516

Deferred Tax Assets

(281)
101

(408)

(549)

(337)

(939)

(15,733)(18,249)

456

447

134

123

Total

$ 9,596

Net Operating Loss
Carry Forwards (*A)
Valuation allowance

Over 5 years$ 4,263

Millions of yen
Over 1 year
within2 years

Over 4 years
within5 years$ 9,011

In fiscal year ended in 2020, March, Note for this section is omitted due to loss before income taxes.

Within1 yearOver 3 years
within4 years$ 7,805—

14.2%

Effective income tax rate

Over 2 years
within3 years$ 3,459

—

(2.7)

Other

Over 1 year
within2 years

Net Operating Loss
Carry Forwards

—

(6.0)

Unrealized gain

2021

Within1 year——0.9

Effect of tax rate change

Thousands of U.S. dollars (Note 1)

2020

6,003

7,266 (*B)

Thousands of
U.S. dollars (Note 1)

Millions of yen

Buildings and structures

Land

Other

Total

2021

2020

¥1,571¥ 9,454

663

376

2,907

¥5,1422021$14,197

3,137

26,261¥12,969$46,451

5,992

Millions of yen

2020

The above assets were pledged against the following liabilities:

Within1 yearOver 2 years
within3 years

Over 3 years
within4 years

Over 4 years
within5 years

Over 5 years

Total

Net Operating Loss
Carry Forwards (*A)

Over 1 year
within2 years¥2,701¥3,739

¥ 835

¥ 642

¥ 606

¥ 12,324¥ 20,849

Deferred Tax Assets

2,335

(564)

(716)

(522)

(482)

(11,242)(13,893)

Valuation allowance

(366)

3,175

118

120

123

1,081

6,956 (*B)

Thousands of
U.S. dollars (Note 1)

Millions of yen

Short-term bank loans

Current portion of long-term debt

Long-term debt
Total

2021

¥1,625519

6,281¥8,4252020

2021¥1,790$14,678

2,131

56,738384¥4,307

4,688$76,105

Contents
Contents

Management
Management
Message
Message

About
About NIPRO
NIPRO

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

40

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

6. Investment Securities

Millions of yen

Investment securities as of March 31, 2021 and 2020 consisted of the following:Thousands of
U.S. dollars (Note 1)

Millions of yen

Non-current:

Marketable:

Marketable equity securities

2021

2020

2021

¥30,504¥24,597$275,534

958

867

8,660

30,504

Subtotal

Non-marketable securities¥31,463

Total

24,597

275,534¥25,464$284,195

The carrying amounts and aggregate fair values of marketable securities for investments as of March 31, 2021 and2020 were as follows:

Available-for-sale securities
Equity securities
Total

Cost

Unrealized gain

¥17,410¥13,274¥17,410

Unrealized loss

¥180

¥13,274¥180

Fair Value¥30,504¥30,504

Thousands of U.S. dollars (Note 1)

Available-for-sale securities
Equity securities
Total

Cost

Unrealized gain

2021

Equity securities
Total

Unrealized gain

¥23,5012020

Unrealized loss

¥1,635¥23,501¥539¥1,635¥539

Fair Value¥24,597¥24,597

Proceeds from sales of securities and gross realized gains or losses on those sales for the years ended March 31, 2021
and 2020 were as follows:

Thousands of
U.S. dollars (Note 1)

Millions of yen

Proceeds

Gains on sales

Losses on sales

2021¥7,629
1,761
320

2020

2021

¥8,868$68,911

501

2,894

3,576

15,913

No impairment loss was applied to securities in the fiscal year ended March 31, 2021.

Millions of yen

2021

Available-for-sale securities

Cost

Unrealized loss

Fair Value$157,258$119,904$1,627$275,535$157,258$119,904$1,627$275,535

In case fair value for the marketable equity security fell by over 50% from the acquisition cost, the stock impairment

is applied unless there is a reasonable disproval, the asset is treated as an impairment. In case fair value for themarketable equity security fell by 30% to 50%, impairment is applied except when it is expected to recover.

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan
Management Plan

Reviewof
Review ofOperations
Operations

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

41

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

7. Financial Instruments(1) Circumstances on financial instruments

As the Company manages its exposure to credit risk by limiting its funding to high-credit rating financial institutions,the Company recognizes that the exposure to credit risk is extremely low.

The Company executes and manages derivative transactions under the corporate derivative management policy,(a) Policy for financial instruments

which prescribes the authority and limitations on derivative transactions.

a high level of safety. Based on capital investment planning and financing planning, the Company and its consolidated(c) Supplemental information on fair values of financial instruments

corporate bonds with a warrant of booking new stocks.

market price is not available. Because variable factors are counted in the estimation, the estimated values may vary by

The Company and its consolidated subsidiaries manage the temporary surplus funds by deposits with banks that havesubsidiaries raise funds for business operation with bank loans, corporate bonds, and issuing convertible bond-type
The Company and its consolidated subsidiaries enter into derivative transactions for the purpose of reducing

funding costs and hedging their exposures to foreign exchange fluctuations and interest rate fluctuations, but not for

Fair values of financial instruments include values based on market price and reasonably estimated values when
adopting different assumptions.

With respect to the contract amounts related to derivative transactions in Note 8, the amounts do not reflect

speculative purposes.

market risks to derivative transactions.

(b) Details and risk of financial instruments and risk management(2) Fair values of financial instruments

denominated in foreign currencies are exposed to the market risk of fluctuation in foreign currency exchange rates.

instruments for which the market value is extremely difficult to determine are not included as described in remark 2.):

Receivables such as trade notes and accounts receivable are exposed to customer’s credit risk. Receivables
In order to reduce the customer’s risk, the Company monitors the dues and balances by customer in accordance

The book values, fair values and the differences between them as of March 31, 2021 and 2020 are as follows (Financial
Millions of yen

with the Company’s credit administration regulations.

Investment securities are exposed to market fluctuation risk, but mainly consist of equity of the companies which

conduct business with the Company. The Company periodically reviews the market price of such securities.
Payables such as trade notes, accounts payable, and accounts payable other are due within 1 year.

Payables denominated in 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-term loans payable aremainly borrowed to make capital expenditures. A part of long-term loans with a floating interest rate has the risk ofinterest rate fluctuation, but the Company and its consolidated subsidiaries use a interest rate swaps to solidify theinterest rate.

Bonds, commercial paper, and convertible bonds are mainly issued to raise funds for the retirement of bonds.

Lease obligations are mainly for capital expenditures, free from interest-rate risk because the interest rate is fixed.

Payables, loans, and bonds are exposed to liquidity risk, but the Company and its consolidated subsidiaries manage

the risk by establishing cash planning.

Regarding derivatives, the Company enters into forward exchange contracts to hedge against the risk of fluctuations

in foreign currency exchange rates associated with trade receivables and payables denominated in foreign currencies,

interest rate swaps to hedge against the risk of fluctuations in interest rates associated with loans payable, andcurrency swaps to hedge against the risk of foreign exchange rate fluctuations. For more information on the use ofhedge accounting, including hedging instruments, hedged items, the hedging policy, and the method for assessmentof hedge effectiveness, please refer to “2. Summary of Significant Accounting Policies” (m) Hedge Accounting.

Cash and cash equivalents, time deposits

Trade notes and accounts receivable, net of allowance for
doubtful receivables
Investment securities

Book value

2021

Fair value¥ 90,274¥ 90,274

139,338

139,338

30,50430,504

Difference

¥

—
—
—

Assets total¥260,117¥260,117¥—

Trade notes and accounts payable¥ 67,219¥ 67,219¥—

135,587

135,587

Short-term bank loans, current portion of long-term debt,
and current portion of convertible bonds

33,254

Other notes and accounts payable (*1)

33,254Long-term debt

370,190369,732

Liabilities total¥638,311¥635,309

Lease obligations (*2)

Derivatives (*3)

32,060

¥

1,527

—

29,516

¥

1,527

—

(458)

(2,543)¥(3,001)¥—

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

42

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

Remark 1

Millions of yen

2020

Book value

Cash and cash equivalents, time deposits

Trade notes and accounts receivable, net of allowance for
doubtful receivables

Fair value¥ 95,925¥ 95,925

151,325

151,325

24,597

Investment securities

Difference¥—

24,597

Assets total¥271,848¥271,848¥

Trade notes and accounts payable¥ 69,539¥ 69,539¥

162,016

162,016

Short-term bank loans, current portion of long-term debt,
and current portion of convertible bonds

22,156

Other notes and accounts payable (*1)

360,456

360,635

Liabilities total¥627,403¥626,692

13,235

Lease obligations (*2)¥

Derivatives (*3)

¥

—
—

—

179

12,343(86)——

22,156Long-term debt

—

(891)

¥(711)(86)¥—

Thousands of U.S. dollars (Note 1)

Cash and cash equivalents, time deposits

Book value

2021

Fair value

Difference$ 815,412$ 815,412

Trade notes and accounts receivable, net of allowance for
doubtful receivables

1,258,594

1,258,594

275,534

275,534

Assets total$2,349,541$2,349,541$—

Trade notes and accounts payable$ 607,165$ 607,165$—

1,224,706

1,224,706—

300,371

300,371—

3,343,789

3,339,647(4,141)

289,586

266,613(22,972)$5,765,619$5,738,504$(27,114)$$$

Investment securities

Short-term bank loans, current portion of long-term debt,
and current portion of convertible bonds

Other notes and accounts payable (*1)
Long-term debt

Lease obligations (*2)
Liabilities total

Derivatives (*3)

13,80013,800

$

—
—
—

—

(*1) Other notes and accounts payable are included in accrued expenses and notes and accounts payable for plant and equipment on thebalance sheet.
(*2) Lease obligations are included in other current liabilities and other long-term liabilities on the balance sheet.
(*3) The amount represents the net amount of assets (liabilities).

Methods used to calculate fair values of financial instruments and the details of securities
and derivatives<Assets>• Cash and cash equivalents, time deposits, trade notes, and accounts receivable
Cash and cash equivalents, trade notes, and accounts receivable are stated at the relevant book value because thesettlement periods are short and the fair values 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, accounts payable, short-term bank loans, and current portion of long-term debt
Because the settlement periods of the above items are short and their fair values are almost the same as their bookvalues, the relevant book values are used.
• Other notes and accounts payable
Because the settlement periods of the above items are short and their fair values are almost the same as their bookvalues, the relevant book values are used.
• Long-term debt
The fair value of long-term debt 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 similar new loan was entered into.
• Convertible bonds
The market value of convertible bonds is calculated based on the market price.
• 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.
• Derivatives
The fair value information for derivatives is included in Note 8.
Remark 2

Financial instruments for which the fair value is difficult to determine
Thousands of
U.S. dollars (Note 1)

Millions of yen

Unlisted equity securities

2021

2020

¥16,694¥14,695

2021$150,795

They are not included in investment securities as these items have no market value and it is difficult to estimate the future cash flow, so it
is extremely difficult to determine their fair values.

Remark 3

Planned redemption amounts after the balance sheet date for monetary receivables with maturity
dates are as follows:
Thousands of
U.S. dollars (Note 1)

Millions of yen

2021

Cash and cash equivalents, time deposits

Trade notes and accounts receivable

2020

Within 1 year

Within 1 year

139,338

151,325¥ 90,274¥ 95,925

2021

Within 1 year

$ 815,412
1,258,594

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan
Management Plan

Reviewof
Review ofOperations
Operations

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

43

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

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, 2021 are as follows:
Millions of yen

Short-term bank loans, current portion of long-term debt, and current portion of convertible bonds
Long-term debt

Lease obligations
Total

Within 1 year

¥135,587—

Over 1 year but
within 2 years

Over 2 years but
within 3 years

67,52649,979

¥

4,865

—

¥

3,216

¥140,452

2021—

Over 3 years but
within 4 years

Over 4 years but
within 5 years

66,87538,340¥2,807¥70,743

—

¥

2,377

¥52,787—

Over 5 years

¥

1,827

¥69,253—

147,467

16,965¥40,168¥164,432

Thousands of U.S. dollars (Note 1)

Short-term bank loans, current portion of long-term debt, and current portion of convertible bonds
Long-term debt

Lease obligations
Total

Within 1 year

$1,224,706—

Over 1 year but
within 2 years

Over 2 years but
within 3 years

609,944451,446

$

—

$

2021

—

Over 3 years but
within 4 years

Over 4 years but
within 5 years

604,061

346,317

$

—

$

—

Over 5 years$—

1,332,018

43,94529,05425,363

21,477

16,506

153,239$1,268,651$638,998$476,810$625,539$362,824$1,485,257

Over 3 years but
within 4 years

Over 4 years but
within 5 years

43,05359,812Millions of yen

Short-term bank loans, current portion of long-term debt, and current portion of convertible bonds

Long-term debt

Lease obligations

Total

Within 1 year

¥162,016—

3,080¥165,097

Over 1 year but
within 2 years

Over 2 years but
within 3 years

79,84661,016

¥

—

1,996

¥81,842

¥

—

3,901

¥64,918

2020

¥

—

1,076

¥44,129¥—913¥60,726

Over 5 years¥—

116,7272,266¥118,994

Contents
Contents

Management
Management
Message
Message

About
About NIPRO
NIPRO

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

44

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

8. Derivatives

Thousands of U.S. dollars (Note 1)

The Company and its consolidated subsidiaries had the following derivatives contracts outstanding at March 31, 2021
and 2020.

2021

Method of hedge accounting

Principle method(1) Derivatives for which hedge accounting has not been applied.

Type of derivative

Currency swap

Principal hedge item

Account receivables

Contract
amount$—2021

Transaction other thanmarket transaction

Over 1 year out-ofcontract amountContract amount¥1,5003,473

Foreign currency forward contracts

Method of hedge accounting

Fair value¥—¥1,539

—

0

—

186

Currency swap

76

Principle method

Type of derivative

Currency swap

Principal hedge item

Account receivables

Transaction other thanmarket transaction

Over 1 year out-ofcontract amountContract amount$13,555

Foreign currency forward contracts

Principle method

Fair value$13,903

31,378

—

690

1,682

—

0

Exceptional accounting method
for interest rate swap

Type of derivative

Principal hedge item

Contract
amountInterest rate swap Long-term loans¥ 4,234

Interest rate swap Long-term loans

15,000Over 1 year out-ofcontract amountContract amountType of derivative

Non-deliverable forward

Foreign currency forward contracts

Currency swap¥

876

13,089

¥—

¥(38)

—

(2)

—

371

Method of hedge accounting

Fair value

18

Principle method

Exceptional accounting method
for interest rate swap

Type of derivative

Principal hedge item

Contract
amountInterest rate swap Long-term loans$ 38,252

Interest rate swap Long-term loans

135,489

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

Method of hedge accounting

Principle method

Millions of yen

Exceptional accounting method
for interest rate swap

2021

Currency swap

Over 1 year
out-of-contract
amountFair value¥ 1,602¥(87)

15,000(*1)

Principal hedge item

Accounts receivable

Over 1 year
out-of-contract
amountFair value$ 14,475$(793)

135,489

(*1)

2020

(a) Currency-related

Principle method¥(9)Millions of yen(2) Derivatives for which hedge accounting has been applied.

Type of derivative

¥—

2021

2020

Method of hedge accounting

Fair value

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

Transaction other thanmarket transaction¥394

Over 1 year
out-of-contract
amountMillions of yen

Method of hedge accounting$—

Currency swap

Contract
amount2021

2021

Type of derivative$—(b) Interest related

Thousands of U.S. dollars (Note 1)

Non-deliverable forward

$—

2020

Millions of yen

Type of derivative

Fair value

Millions of yen

Currency-related

Non-deliverable forward

Over 1 year
out-of-contract
amountContract
amount¥—Fair value is based on information provided by a financial institution at the end of the fiscal year.

Over 1 year
out-of-contract
amount¥—Fair value¥—

Type of derivative

Principal hedge item

Contract
amountInterest rate swap Long-term loans¥ 3,730

Interest rate swap Long-term loans

15,000Over 1 year
out-of-contract
amountFair value¥ 3,190¥(60)

15,000(*1)(*1) The fair value of the interest rate swap to which the exceptional accounting method is applied and the fair value of forward foreignexchange contracts, etc., to which the allocation method is applied are included in the fair value of long-term loans in Note 9.
“Financial Instruments” because such interest rate swaps are accounted for as a single item with the corresponding long-term loans.

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

45

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

9. Short-Term Loans and Long-Term Debt

10. Accrued Pension and Severance Liabilities

Short-term loans comprised overdrafts and promissory notes.

The weighted-average interest rates of short-term bank loans for the years ended March 31, 2021 and 2020 were0.8510% and 0.7643%, respectively.

Long-term debt comprised the following:

0% convertible bond due 2021

1.6% unsecured bonds with subordinated specials due 2055

0.674% unsecured bonds due 2028

¥

2021

3,000

—

50,00010,0000.44% unsecured bonds due 2029

10,000Long-term bank loans due through 2077, with weightedaverage interest rate of 0.6016% for the year ended March
31, 2020, and 0.6135% for the year ended March 31, 20190.014%~0.120% unsecured bonds due from 2019 to 2025 (*1)

Total

Thousands of
U.S. dollars (Note 1)

4,500

¥

2020

3,000

25,000$2021

27,097——

451,630

10,00090,326

10,0006,100

40,646

378,741

397,294

3,421,026¥456,241¥451,394$4,121,051

The aggregate annual maturities of long-term debt outstanding at March 31, 2021 are as follows:

2022

2023

2024 and thereafter
Total

Certain consolidated subsidiaries have recorded liabilities for retirement benefit and assets for a retirement benefit

Millions of yen

Thousands of
U.S. dollars (Note 1)

2021

2021

¥ 90,916

638,998

273,8542,473,621¥488,301(a) The reconciliation of beginning and ending balances of the benefit obligation (excluding the defined benefit
plans applied based on the simplified method) are as follows:

476,810$4,410,639

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 future indebtedness 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 bankloan that becomes due, and in case of default and certain other specified events, against all other loans payable to the bank.

Thousands of
U.S. dollars (Note 1)

Millions of yen

2021

2020

2021

¥16,961¥15,529$153,208—

70—

Service cost

1,460

1,293

13,191

Actuarial gains and losses

(184)

356

(1,670)Benefit payments

(600)

(556)

(5,422)¥17,684¥16,961$159,738

Obligation at April 1

Beginning balance of subsidiary consolidated fromthis fiscal year

Interest cost

Prior service cost

Other (foreign currency translation adjustments, etc.)

Obligation at March 31

74
0

(26)

77

184

4

672
0
(239)

(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) is as follows:
Thousands of
U.S. dollars (Note 1)

Millions of yen$ 821,209

70,74352,787(1) Defined Benefit Plans

90,326(*1) This is the total amount of the bonds Goodman Co., Ltd. issued.
In March 2020, the Company issued ¥3,000 million (US$27,097 thousand) of 0.25% unsecured bonds due 2025.
In October 2018, the Company issued ¥10,000 million (US$90,326 thousand) of 0.674% unsecured bonds due 2028.
In October 2019, the Company issued ¥10,000 million (US$90,326 thousand) of 0.44% unsecured bonds due 2029.
In September 2020, the Company issued ¥50,000 million (US$451,630 thousand) of 1.6% unsecured bonds due 2055.
From February 2017 to March 2020, Goodman Co., Ltd. issued ¥6,100 million (US$56,050 thousand) of 0.014% and 0.120% unsecured
bonds due from 2022 to 2025.

2021

benefit plans, and defined contribution pension plan for employees.
based on the simplified method.

Millions of yen

0.25% unsecured bonds due 2025

The Company and certain consolidated subsidiaries have defined benefit pension plans and unfunded retirement

Fair value of plan assets at April 1

Expected return on plan assets
Actuarial gains and losses

Company contribution
Benefit payments

Other (foreign currency translation adjustments, etc.)

Fair value of plan assets at March 31

2021

2020

2021

¥10,624¥10,500$ 95,962

742

(337)

6,706

(428)

(475)

(3,869)¥11,950¥10,624$107,942

163

842

6

164

783

(11)

1,477
7,609
55

Contents
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About
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Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

46

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements(c) The reconciliation of beginning and ending balances of liabilities for retirement benefit applied based on(f) Remeasurements of defined benefit plans (Other Comprehensive Income)the simplified method is as follows:

Thousands of
U.S. dollars (Note 1)

Millions of yen

2021

¥ 83

Liabilities for retirement benefit at April 1

15

Retirement benefit cost

¥72

140

—

—

—

10

3

98

(2)

—

Other (foreign currency translation adjustments, etc.)¥108

Liabilities for retirement benefit at March 31

$754

10

Contribution for the plan

Decreasing by sale of subsidiary shares

2021

2020

(1)

Retirement payments

The breakdown of the items recorded in adjustments to defined benefit plans is as follows:

(12)

—

—

¥83

$981

Plan assets

2021

Thousands of
U.S. dollars (Note 1)¥ 14,662$ 137,120

3,230

4,038

29,178(11,950)
2,616

Net defined benefit liability

5,846

Net assets (liabilities) on the consolidated balance sheet

2021¥ 15,180

Benefit obligations on non-funded scheme

Net assets (liabilities) on the consolidated balance sheet

2020

5,846

¥ 5,846(10,624)(107,942)

2,382

23,634

6,421

52,812

6,421¥ 6,421$ 52,812

Thousands of
U.S. dollars (Note 1)

Millions of yen

2021¥1,460
74

2020

2021

¥1,293$13,191

77

672

Expected return on plan assets

(163)

(164)

(1,477)

Amortization of past service obligation

(144)

40

(1,301)

Amortization of actuarial gains and losses

Retirement benefit cost based on the simplified method

Other
Total

474

15

10

¥1,727

365

4,281

10

140

¥1,635$15,602

11

2021

¥

2020

(0)

1,281

$

¥(526)$11,571(342)¥1,281

95

2021¥(184)(0)

11,571(g) Remeasurements of defined benefit plans (Accumulated Other Comprehensive Income)The breakdown of the items recorded in adjustments to defined benefit plans is as follows:

Unrecognized actuarial loss
Total

Thousands of
U.S. dollars (Note 1)

2021

2020

¥228

¥

¥447

¥ (833)218

373(1,206)2021$2,068
1,972$4,040(h) Items concerning pension assets
1. The breakdown of pension assets

The ratios of the plan assets are as follows:
Bonds

Equities

2021

2020

27%

17%

38%

44%

General account

28%

32%

Total

100%

100%

Others(e) The breakdown of net pension and severance costs is as follows:

Interest cost

Total

52,812(*) Including the defined benefit plans applied based on the simplified method

Service cost

Actuarial gains and losses

Unrecognized prior service costand liabilities and assets for retirement benefit are as follows:

Benefit obligation on funded scheme

Prior service cost

Millions of yen(d) The reconciliation of ending balance of the benefit obligation and the fair value of the plan assets,

Millions of yen

Thousands of
U.S. dollars (Note 1)

Millions of yen(*) Including defined benefit plans applied based on the simplified method7%7%

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
SectionData●● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

47
●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

2. Setting of the long-term expected 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 and expected long-term rate of return from the diverse assets composing the plan assets.

The significant provisions in the Corporate Law of Japan (the “Corporate Law”) that influence financial and accounting
matters are summarized below:(i) Calculation basis of actuarial methods(a) Dividends

The main calculation basis of actuarial methods at the end of the period is as follows:
2021

2020

Under the Corporate Law, companies can pay dividends at any time during the fiscal year in addition to the year-end

Primarily 1.5%

board of directors, (2) having independent auditors, (3) having a board of corporate auditors, and (4) the service

Discount rate

Primarily 0.4%

Primarily 0.2%

Assumed wage increase rate

Primarily 6.7%

Primarily 6.7%

Primarily 1.5%

Expected long-term rate of return

12. Net Assets

dividend upon a resolution at the shareholders’ meeting. For companies that meet certain criteria such as (1) having aperiod of the directors is prescribed as one year rather than the normal term of two years by its articles of incorporation,
the board of directors may declare dividends (except for dividends in kind) if the company has prescribed so in its(2) Defined Contribution Retirement Plans

articles of incorporation. The Company’s present system meets the first three criteria but the two-year service period

The amount of necessary contributions to defined contribution retirement plans within the Company and consolidated
subsidiaries was ¥608 million (US$5,499 thousand).

of the directors does not meet the fourth criterion.

Interim dividends may also be paid once a year by the resolution of the board of directors if the articles ofincorporation of the company stipulate so. The Company’s articles of incorporation contain such a stipulation, and it
pays interim dividends 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

11. Commitments and Contingent Liabilities

treasury stock.

The Company and its consolidated subsidiaries had the following commitments and contingent liabilities:
Millions of yen

Export drafts discounted

Endorsed notes
Total

2021

¥

8

¥380

¥388

(b) Increases/Decreases and Transfer of Common Stock, Reserve and Surplus

Thousands of
U.S. dollars (Note 1)

2020

¥17

¥—
¥17

2021

$

80

$3,432$3,513

The Corporate Law requires that an amount equal to 10% of dividends must be appropriated as a legal reserve(a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on theequity account charged upon the payment of such dividends until the total of aggregate amount of the legal reserve
and additional paid-in capital equals 25% of the common 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 theshareholders’ meeting.

The Company’s legal reserve, which is included in retained earnings, amounted to ¥5,306 million (US$47,935

thousand) as of March 31, 2021, and its additional paid-in capital, which is included in capital surplus, amounted to¥635 million (US$5,738 thousand) as of March 31, 2021.

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan
Management Plan

Reviewof
Review ofOperations
Operations

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
SectionData●● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

48
●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

13. Business Combination

14. Segment Reporting

Transaction under common control

1. Outline of Reportable Operating Segments(1) Outline of the business combination

Related Information”, the reportable operating segments are components of an entity for which separate financial

1) Company name and business line at the time of the business combination
Name of the company: Nipro Corporation

Business line: Manufacturing and marketing of medical equipment, pharmaceuticals, pharmaceutical packaging.
Name of the company: NIPRO MEDICAL CORPORATIONBusiness line: Marketing of medical equipment

Applied ASBJ Statement No. 17 “The Revised Accounting Standard for Disclosures of Segments of an Enterprise andinformation is available and such information is evaluated regularly by the board of directors in deciding 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 performance of sales and manufacturing of each division regardless of their products. Accordingly, the Company

has three reportable operating business segments according to the divisions (Medical-Related business,

2) Date of the business combination

Pharmaceutical-Related business and Pharma Packaging business), which are divided mainly by their products.

3) Legal form of the business combination*Medical-Related

January 1, 2021

In-kind investment of our subsidiaries’ capital investment into NIPRO MEDICAL CORPORATION.

The domestic division sells injection and infusion products, artificial organ products, highly functional products,(our consolidated subsidiary)

dialysis products, diabetic products, and pharmaceuticals such as generic and kit products. In the Global businessWe are strengthening business management and efficient use of management resources in the US businesssales injection and infusion products, artificial organ products, and diabetic products.

4) Outline and purpose of the transaction

through NIPRO MEDICAL CORPORATION.

For this purpose, we have investment of the consolidated subsidiary owned by the Company invested in kind in
Nipro Medical Corporation.
NIPRO MEDICAL LTDA.

SALBEGO LABORATORIO FARMACEUTICO LTDA.
(2) Implemented accounting treatment

This merger was processed as a transaction under common control, based on the “Accounting Standard for Business

Combinations” (ASBJ Statement No. 21, January 16, 2019) and the “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, January 16, 2019).

division, head office plays the central role, placing overseas sales and manufacturing bases for medical equipment and*Pharmaceutical-Related

The pharmaceutical division sells pharmaceutical products with containers for combination products (injectable kit
products) consigned by other pharmaceutical companies. Domestic subsidiaries manufacture and sell injectabledrugs, oral drugs, and combination products.
*PharmaPackaging

The PharmaPackaging division sells glass for vials and ampoules for medical use, glass for thermos bottles, glass forlighting, and containers for combination products (injectable kit products). Overseas subsidiaries manufacture and selltube glass and glass mainly for syringes, and vials and ampoules for medical use.

From fiscal year ended March 31, 2019, the Company has conducted reorganization for the purpose of engaging

in synthetic PharmaPackaging business and increasing synergies for Pharmaceutical-Related business. As a resultof this reorganization, some business divisions included in Pharmaceutical-Related business were changed to thePharmaPackaging business.

The presentation for the prior fiscal year is not restated.

Contents
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About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
SectionData●● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

49
●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

Business segment information for the years ended March 31, 2021 and 2020 was as follows:
Millions of yen

2021

Reportable segment

Medical-Related

Pharmaceutical-Related

PharmaPackaging

Total

Outside¥347,648¥ 68,564¥38,655¥454,867

Total

353,766

87,04744,807

485,621Net sales:Intersegment

Operating income (loss)

6,117

39,41518,483

6,151

10,072

1,992

Other
(*1)

¥

30,75351,480Total

Adjustment(*2)

Consolidated
financial statements

691¥455,559¥—¥455,559

2,347

487,968(32,409)455,559

60,807854,396

1,656

376

32,409(32,409)51,856(24,229)—

27,627

Identifiable assets

484,088

185,158

68,127

737,374

56,214

793,588

Depreciation and amortization

18,30012,168

4,244

34,713279

34,993

4,855

39,849¥ 48,113¥ 20,719¥ 5,450¥ 74,283

127¥ 74,411¥ 4,449¥ 78,861

Other items

Amortization of goodwill

Increase in tangible and intangible fixed assets

2,442

10

324

2,777

¥

—

2,777

—

2,777

Thousands of U.S. dollars (Note 1)

2021

Reportable segment

Other
(*1)

Total

Adjustment(*2)

Consolidated
financial statements

Medical-Related

Pharmaceutical-Related

PharmaPackaging

Total

Outside$3,140,170$ 619,313$349,159$4,108,643

6,242$4,114,886

55,261

166,954

55,565

277,780

14,964

292,745(292,745)

—

Total

3,195,431

786,268

404,724

4,386,424

21,206

4,407,631(292,745)

4,114,886

Net sales:Intersegment

Operating income (loss)
Identifiable assets
Other items

Depreciation and amortization
Amortization of goodwill

Increase in tangible and intangible fixed assets

$

$

—

$4,114,886

356,023

90,98017,997465,000

3,401

468,401(218,856)

249,545

4,372,581

1,672,466

615,364

6,660,412

507,765

7,168,177

549,254

7,717,431

165,299

109,917

38,340313,557

2,522

316,079

43,861359,941

22,06599

2,926

25,091—25,091—25,091$ 434,589$ 187,151$ 49,236$ 670,977

1,153$ 672,131$ 40,194$ 712,326$

Contents
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About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
SectionData●● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

50
●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

Millions of yen

2020

Reportable segment

Medical-Related

Pharmaceutical-Related

Outside¥335,767¥ 70,357¥36,217¥442,342

Total

341,875

88,95841,883472,718

Identifiable assets

454,185

176,605

65,914

Depreciation and amortization

17,296

12,092¥ 27,296¥ 13,598

Net sales:Intersegment

Operating income (loss)
Other items

Amortization of goodwill

Increase in tangible and intangible fixed assets

6,108

36,2492,800

18,601
13,19610

PharmaPackaging

Total

Other
(*1)

174

¥442,516

1,567

474,285696,706

19,1084,313

33,702¥ 6,036¥ 46,931

5,666
675

332

30,376¥

Total

50,121

3,143¥442,516(31,769)

442,516

715,814116,050

831,865

194

33,896

4,785

38,68275¥ 47,007¥ 17,663¥ 64,670—

31,76950,2983,143¥

Consolidated
financial statements

—

1,393

176

¥

Adjustment(*2)(31,769)(23,877)——

26,4203,143(*1) “Other” is the business segment which is not included in a reportable segment and consists of real estate income and sales by headquarters.
(*2) Adjustment is as follows:• Adjustments for operating income ended March 31, 2021 and 2020 include ¥371 million (US$3,351 thousand) and ¥(1,371) million of adjustment for unrealized gain and ¥(24,601) million (US$(222,211) thousand) and ¥(22,506) million of corporate cost, respectively. Corporate costconsists primarily of sales, general and administrative expenses and research and development costs which do not belong to a reportable segment.
• Adjustments for Identifiable assets ended March 31, 2021 and 2020 include ¥(53,589) million (US$(484,054) thousand) and ¥(14,784) million of elimination of inter-segment transactions and ¥114,397 million (US$1,033,303 thousand) and ¥130,835 million of corporate assets,
respectively. Corporate assets consisted primarily of cash and deposits, investment securities, assets for development, and assets for the management division of head office which do not belong to a reportable segment.
• Adjustments for depreciation and amortization ended March 31, 2021 and 2020 are for corporate assets. Depreciation and amortization and Increase in tangible and intangible fixed assets include long-term prepaid expenses.
• Adjustment for increase in tangible and intangible fixed assets is increase in corporate assets.

Contents
Contents

Management
Management
Message
Message

About
About NIPRO
NIPRO

Outline of theMedium-term
Medium-Term
Management
Plan

Reviewof
Review ofOperations
Operations

Management Plan

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

51

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

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

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

Millions of yen
Reportable segment

Loss on impairment of
fixed assets¥

Unamortized balance of
goodwill

Other

Adjustment

Total¥ 1,437¥—¥—¥ 1,437

13,565——

13,565

PharmaceuticalRelated

PharmaPackaging

Total

234

¥—

¥1,202

13,37332

158

Medical-Related

Millions of yen

2021

Thousands of U.S. dollars (Note 1)
Reportable segment

Loss on impairment of
fixed assets

Unamortized balance of
goodwill$

Other

Adjustment

Total$ 12,984$—$—$ 12,984

122,528——

122,528

PharmaPackaging

Total

2,120

$ —

$10,863

120,799

297

1,430

Reportable segment

Unamortized balance of
goodwill

Property, plant andequipment

Other

Adjustment

Total¥ 5,655¥—¥—¥ 5,655

14,738——14,738

Medical-Related

PharmaceuticalRelated

PharmaPackaging

Total¥ 2,626¥—¥3,02914,19343501

232,738

2021

Europe

Asia

Total

¥71,572¥52,167¥61,275¥455,559

18,042

23,876

61,249335,906

Japan

Americas2021

Europe

Asia

Total

$2,443,708$646,481$471,204$553,473$4,114,885

2,102,231

163,788

215,662553,238

3,034,929

Millions of yen

Property, plant andequipment

2020¥270,543

Americas

Thousands of U.S. dollars (Note 1)

Net sales

Millions of yen

Loss on impairment of
fixed assets

Property, plant andequipment

Net sales

2021

PharmaceuticalRelated

Medical-Related

Net sales

Japan

Japan

¥267,708
206,748

Americas

2020

Europe

Asia

Total

¥64,153¥50,801¥59,853¥442,516

16,533

21,99062,277

307,551

Contents
Contents

About
About NIPRONIPROManagement
Management
Message
Message

Outline of theMedium-term
Medium-Term
Management
Plan
Management Plan

Reviewof
Review ofOperations
Operations

Management
Management
Foundation
Foundation

Financial/
Financial/
Data Section
Section
Data

NIPRO
NIPRO Annual
Annual Report
Report 2021
2021

52

●
● Financial
Financial Review
Review●
en-Year Summary● TTen-Year
Summary●
onsolidated Balance● CConsolidated
Balance Sheets
Sheetsonsolidated Statements●● C
Consolidated
Statements ofof Income
IncomeFinancial/Data Section●
onsolidated Statements● C
Consolidated
Statements ofof Comprehensive
Comprehensive Income
Incomeonsolidated Statements●● C
Consolidated
Statements ofof Changes
Changes inin Equity
Equity●onsolidated Statements● C
Consolidated
Statements ofof CashCash Flows
Flows●● Notes
Notes toto Consolidated
Consolidated Financial
Financial Statements
Statements●
orporate Information● C
Corporate
Information

Notes to Consolidated Financial Statements

15. Selling, General and Administrative Expenses

17. Impairment Loss

Significant components of selling, general and administrative expenses for the years ended March 31, 2021 and 2020
were as follows:

Thousands of
U.S. dollars (Note 1)

Millions of yen

Salaries

2021¥20,3962020¥20,020

2021

losses of ¥1,437 million (US$12,984 thousand) and ¥5,655 million, respectively.
The following table presents the major impaired assets.

$184,237

16. Research and Development Expenses
Research and development expenses for the years ended March 31, 2021 and 2020 were ¥18,652 million (US$168,482
thousand) and ¥18,204 million, respectively.

In the years ended March 31, 2021 and 2020, the Company and its consolidated subsidiaries recorded impairment

Millions of yen
Purpose of use

Idle asset

Location

Jilin Nipro Jiaheng
Pharmaceutical
Packaging Co., Ltd.

2021

Type of asset

Buildings and structures,
Machinery and equipment

Thousands of
U.S. dollars (Note 1)

2021

AmountAmount¥1,202$10,863

The assets for business use are divided into groups on which separate financial information is reported for management accounting
purposes, whereas leased assets and idle assets are categorized individually. Headquarters assets, R&D facilities, dormitories, andcompany-offered houses are categorized into assets for common use, since these assets cannot generate identifiable cash flows.
The company recognized the impairment loss, since the economic performance of the above-mentioned assets will be worse thanwhat the company originally expected.
The recoverable amount of an asset group is measured by its net selling price or its value in use. In the case that the recoverable
amount is net realizable value, it shall be based on appraisal value. Whether the recoverable amount is the value in use, it is calculated bydiscounting future cash flow by approximately 5%.
Millions of yen
Purpose of use

Business use
Business use

Location

2020

Type of asset

Jilin Nipro Jiaheng
Buildings and structures, Machinery
Pharmaceutical Packaging Co., Ltd. and equipment
NexMed International Co., Ltd.

Goodwill

Amount¥2,903
2,492

18. Supplemental Disclosures of Cash Flow Information
Supplemental information related to the Consolidated Statements of Cash Flows was as follows:
Thousands of
U.S. dollars (Note 1)

Millions of yen

Cash paid during the year for:
Interest

Income tax

2021

2020

2021

¥3,871¥3,201$34,972

4,207

9,108

38,007

Contents

About NIPROManagement
Message

Outline of theMedium-Term
Management Plan

Review ofOperations

Management
Foundation

Corporate Information

Principal Shareholders
Nippon Electric Glass Co., Ltd.
The Master Trust Bank of Japan ,Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
JP Morgan Chase Bank 385632
Resona Bank Limited
Custody Bank of Japan, Ltd. (Trust Account 5)
NIPRO CORPORATION Employee
Stock Ownership Association
Custody Bank of Japan, Ltd. (Trust Account 6)
Kazumi Sano
Custody Bank of Japan, Ltd. (Trust Account 1)
Total

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
https://www.nipro.co.jp/en/

4-3-4 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan
Telephone :+81-3-5684-5611
Facsimile :+81-3-5684-5610

Number of Employees
4,150
31,10135,251Area
Domestic

CountryJapan

Overseas

ThailandChina

Common Stock

Tokyo Stock Exchange, First Section
Ticker Code:8086

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

Number of shares
held (in thousands)
17,135
10,831
9,104
5,192
3,129
2,285

Percentage of total
shares in issue (%)
10.47
6.62
5.56
3.17
1.91
1.40

2,135

1.30

2,025
1,910
1,813
55,564

1.24
1.17
1.11
33.94

(Yen)

1,800
1,600
1,400
1,200
1,000
800
12

3

2019

6

9

12

3

6

2020

Major Group Companies (As of June 30, 2021)

Tokyo Office

Stock Listings● Consolidated Statements of Comprehensive Income● Consolidated Statements of Changes in Equity● Consolidated Statements of Cash Flows● Notes to Consolidated Financial Statements● Corporate Information

Stock Price Range (Tokyo Stock Exchange)(As of March 31, 2021)

Authorized......................................... 400,000,000 shares
Issued................................................ 171,459,479 shares
Outstanding....................................... 163,097,623 shares
Number of Shareholders..............................76,143

53● Financial Review● Ten-Year Summary● Consolidated Balance Sheets● Consolidated Statements of Income

Financial/Data Section

Parent company
Consolidated subsidiaries
Total

NIPRO Annual Report 2021

Financial/
Data Section

VietnamSingapore
India

BangladeshIndonesia
UAE
BrazilU.S.A.

CanadaBelgium

FranceGermany
Switzerland
RussiaName
Nipro Medical Industries Co., Ltd.
Goodman Co., Ltd.
Nipro Pharma Corporation
Zensei Pharmaceutical Industries Co., Ltd.
Cell Science & Technology Institute, Inc.
NexMed International Co., Ltd.
Nipro (Thailand) Corporation Limited
Nipro Sales (Thailand) Co., Ltd.
Nipro (China) Holdings Co.,Ltd
Nipro (Shanghai) Co., Ltd.
Nipro Trading (Shanghai) Co., Ltd.
Nipro PharmaPackaging (Shanghai) Co., Ltd.
Jilin Nipro Jiaheng Pharmaceutical Packaging Co., Ltd.
Anyang Nipro Changda Pharmaceutical Packaging Co., Ltd.
Chengdu Pingyuan Nipro Pharmaceutical Packaging Co., Ltd.
Nipro Medical (Hefei) Co., Ltd.
Nipro Vietnam Company LIMITED
Nipro Pharma Vietnam Co., Ltd.
Nipro Asia Pte Ltd.
Nipro India Corporation Private Limited
Nipro PharmaPackaging India Private Limited
Nipro Medical (India) Pvt. Ltd.
Nipro JMI Co., Ltd.
Nipro JMI Pharma Ltd.
PT. Nipro Indonesia JAYA
Nipro Middle East FZE
Nipro Medical Ltda.
Nipro Medical Corporation
Nipro PharmaPackaging Americas Corporation
Infraredex, Inc.
CardioMed Supplies INC.
Nipro Europe Group Companies N.V.
Nipro Europe N.V.
Nipro PharmaPackaging Belgium N.V.
Nipro PharmaPackaging France S.A.S.
Nipro PharmaPackaging Germany GmbH
Nipro Pharma Glass AG
Nipro PharmaPackaging Ural LLC

Principal business
Manufacturing and marketing of medical devices
Manufacturing and marketing of medical devices
Manufacturing and marketing of pharmaceuticals
Manufacturing and marketing of pharmaceuticals
Development and manufacturing of cell culture media
Development, manufacturing and marketing of orthopedic products
Manufacturing and marketing of medical devices
Marketing of medical devices
Business management
Manufacturing and marketing of medical devices
Marketing of medical devices
Marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of medical devices
Manufacturing and marketing of medical devices
Manufacturing and marketing of pharmaceuticals
Marketing of medical devices
Manufacturing and marketing of medical devices
Manufacturing and marketing of PharmaPackaging products
Marketing of medical devices
Manufacturing and marketing of medical devices
Manufacturing and marketing of pharmaceuticals
Manufacturing and marketing of medical devices
Marketing of medical devices
Manufacturing and marketing of medical devices
Marketing of medical devices
Manufacturing and marketing of PharmaPackaging products
Development, Manufacturing and marketing of medical devices
Manufacturing and marketing of medical devices
Business management
Marketing of medical devices
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products
Manufacturing and marketing of PharmaPackaging products
Business management
Manufacturing and marketing of PharmaPackaging products

9

12

3

2021