Annual Report 2011
Year Ended March 31, 2011

Profile

Striving to be the Best in the Global Market
A business founded on glass
In 1954, we founded Nippon Glass Shoji Co., Ltd andstarted our business selling glass tubes for ampoules
and tablet bottles. Since then, we have developed
proprietary processing techniques for ampoules andthermos bottles, and our superior processing techniques and high quality have an excellent reputation.
In 1965, the Group advanced into the medical
business thanks to the product development abilities
and sales expertise that we were able to cultivate
through the manufacture and sales of our glass andmaterial business.
In Thailand in 1988, we established Nissho Nipro
Corporation (now Nipro (Thailand) Corporation Ltd.) toreinforce our business overseas. We also entered into
the pharmaceutical business through capital participation in Hishiyama Pharmaceutical Co., Ltd. (now Nipro
Pharma Corporation)

promoting self-realization with creativity and innovation
for the future.”
In particular, the dialyzer has an excellent reputation and a large share of the market both in Japan andoverseas. As for our pharmaceutical business, theGroup has devoted efforts to the generic pharmaceutical industry through the promotion of research anddevelopment, manufacturing and sales of injectableand oral drugs.

Pushing Forward with Global Development
centered on our Medical BusinessCurrently the Nipro Group has three core businesses:
medical, pharmaceutical and glass & materials. In order
to be a global company, the Group has promoted theglobal business mainly with the medical business.
Today Nipro runs companies and branches based inabout 60 locations throughout Europe, Asia and Northand South America.

Based on Our Corporate Philosophy
The Nipro Group continues to grow in the medical field
and has gained trust in this industry thorough the
manufacture and sales of high-value added products.
We are actively striving to open new businessgenres and provide innovative products for safer
medical progress and QOL (quality of life), based on
our corporate philosophy of “conducting businessfrom various aspects, contributing to society andExpanding our Glass & Material Business
Worldwide
We have cultivated our glass processing techniques
since our foundation. With our world-class techniques
for processing glass, we intend to work aggressively togrow the global market for our various glass andmaterial products, in addition to our medical business.

Contents
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47
48

ProfileConsolidated Financial Highlights
At a Glance
A Message to Our Shareholders and Investors
Research and Development
Global Activities
Plant and Equipment
Issues Facing the Company
Status of Corporate Governance, etc.
Board of Directors and Auditors
Financial Review
10 Year Summary
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors
Corporate Information

1 Nipro Corporation Annual Report 2011

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

Consolidated Financial Highlights

Nipro Corporation and its consolidated subsidiaries
Year ended March 31, 2011 and 2010

For the year:
Net sales .....................................................................
Operating income .......................................................
Net income .................................................................
Capital expenditures ...................................................
Depreciation and amortization ....................................
R&D expenses ............................................................
At the year-end:
Total assets .................................................................
Net assets (1) .............................................................
Per share data (in yen and U.S. dollars):
Net income
Basic .....................................................................
Diluted ...................................................................
Cash dividends ...........................................................
Equity .........................................................................

Millions of Yen

Thousands of
U.S. Dollars

2011

2010

2011

¥ 195,943
17,2252,456
23,323
21,244
4,977¥ 177,830
18,094
7,253
15,20918,421
4,846$ 2,356,500
207,156
29,537
280,494
255,490
59,856¥ 476,510
106,510¥ 383,397
114,309$ 5,730,728
1,280,937

¥

¥

$

38.7
34.9
50.0
1,679.4

114.4
114.1
53.0
1,802.3

0.47
0.42
0.60
20.20

Note:
(1) Effective April 1, 2006, the Company adopted a new accounting standard for presentation of net assets in the balance sheet issued by the Accounting Standard
Board of Japan. In the new accounting standard, net assets refer to the sum of total shareholders’ equity, total valuation and translation adjustments and others,
and minority interests. Minority interests, however, have not been included in net assets above to conform to the prior years’ presentation.
The U.S. dollar amounts in this report represent translations of Japanese yen, for convenience only, at the rate of ¥83.15=U.S.$1,
the approximate exchange rate on March 31, 2011.

Nipro Corporation Annual Report 2011 2

At a Glance

MedicalMain Products• Injection- and infusion-related products• Artificial organ-related products• Dialysis-related products• Diabetic-related products

Net Sales Ratio

68%

Net Sales
Operating Income¥132,817 million¥18,437 million

Our varied product line supports people all over the world who rely
on medicine to fight illnesses. We are a world leader in Dialyzer
market share and we have started our full-blown entry into the fieldof diabetes-related products, as one of the world's top maker of
medical devices. We have started construct of manufacturing plants
in developing countries.

In the Japanese market, we will
enhance our product range, expand
our sales and increase our market
share of diabetes-related products
and vascular-related products, inaddition to our core Dialyzer product.
We are actively developing markets
and expanding sales by taking theinitiative to develop and promote thesale of eco-friendly products that
reduce the burden on the environment, and products for safety-use toaid in preventing and reducing the riskof medical accidents and contamination.

With regard to overseas sales, wehave been able to increase the sales
volumes of our core products like
Dialyzer and dialysis machines, aswell as our diabetes-related products.
We are aggressively promoting thedevelopment of our global businessfor diabetes-related products bybuilding upon our acquisition last yearof Home Diagnostics, Inc., now
trading under its new name of Nipro
Diagnostics, Inc.
In addition to our existing efforts todevelop our businesses, we areplanning on expanding our businessthrough constructing plants andreinforcing our sales network incountries with promising economies(China, India, Indonesia and
Bangladesh), based on the concept
of “local production for local consumption”.

Dialysis-related products
Dialyzer

Dialysis-related products
Dialysis machine

3 Nipro Corporation Annual Report 2011

Pharmaceutical
Main Products• Injectable drugs• Oral drugs• Combination products (Kit Products)• External preparations

Net Sales Ratio

19%

Net Sales
Operating Income¥38,005 million¥1,658 million

Glass & Materials
Main Products• Glass tubes• Glass for ampoules• Vials and bottles• Glass for thermos bottles• Glass for lighting purposes

Net Sales Ratio

13%

Net Sales
Operating Income¥24,704 million¥2,701 million

As the largest contract manufacturer group in Japan, we have madeprogress in the sale of our distinctive products. We also contribute tosafety and user-friendliness in the medical front by developing pharmaceutical kit products that combine our technology and knowledgeof both medical products and pharmaceuticals.

We advanced the sales of our characteristic pharmaceutical products,
supported by government policy
which is looking to promulgate theuse of the generic products in Japan.
We have devoted our efforts tocontinued research and developmentin the area of biosimilars and DDS(Drug Delivery System) as well as thedevelopment of generic drugs.
As the result of our activities in
R&D and some detailed sales andmarketing efforts, sales have increased steadily for our liquid-andpowder double bag kits, pre-mixed
bag forumlations, injectable drugs
such as injectable drugs in plastic
ampoules, oral drugs such as orally
disintegrating tablets and extendedrelease tablets.

Going forward, as we apply ourcharacteristic research, development
and manufacturing across all pharmaceutical fields, we will look to develop
and expand our various contract
manufacturing and generic drug
businesses.

Combination products (Injectable kit products)
Half-type kits

We produce high-performance and high-quality glass for medicaluse, the physical and chemical sciences and industry. We sell heatresistant, impact-resistant and chemically durable glass and highprecision glass for medical and industrial use.

We continue to drive innovation inglass processing technologies,
research and development as well as
developing and marketing glass forthermos bottles, glass for lighting
purposes, and glass for pharmaceutical purposes such as ampoules andvials, etc.
We have also promoted joint
ventures in countries where demandfor pharmaceutical glass is predicted
to grow (China and India) as we look
to expand our business through our
high-quality and low-cost pharmaceutical glass products based on our
production technology and quality
output that we have cultivated throughour glass-related business. We will
look to move forward in these markets
through joint ventures with local

companies. From these overseas
locations we will establish our positionin the global market by creatingproduction and sales systems in local
areas.

Glass products

Nipro Corporation Annual Report 2011 4

A Message to Our Shareholders and Investors

We overcame a strong yen anda huge natural disaster to achievesolid business results

Minoru Sano

Despite the continuing long-term economic doldrums, coupled with a strong
yen and an unprecedented natural disaster, the Nipro Group has achieved solid
business results due to promoting global development as well as an active
expansion of our sales activities.

5 Nipro Corporation Annual Report 2011

PresidentOverview of Business Activities andResults during the Current Fiscal Year
We have been able to achieve a remarkableincrease of sales through improving andenhancing the efficiency of our production
and sales as well as actively implementing‘local production for local consumption’from a global perspective.
During the current fiscal year ended March 2011,
despite the solid growth shown by emerging
nations such as China, India, etc. there is astrong feeling that global economy is entering
into a recession due to the debt crisis in Europe,
the slow growth of the American economy andthe rising price of crude oil linked to the worsening situation in the Middle East.
On the other hand, the Japanese economy
has shown signs of a gradual recovery in the firsthalf of the term under review by the effect of theemergency economic stimulus policies that
improved profits for Japanese companies as well
as strong exports to Asia. However, in thesecond half of the term under review, factors
such as the rapid appreciation of the yen, longterm deflation and the poor state of the labormarket coupled with a rise in the cost of raw
materials, etc. had a cumulative impact on thisrecovery, and combined with the Great East
Japan Earthquake of March 11, the economic
outlook for north-eastern Japan and for theJapanese economy as a whole has suddenly
become unclear.
Under this difficult set of circumstances, theNipro Group has been striving to actively improve
our business performance by planning ways toimprove and expand our production and sales
efficiency as well as moving forward with our'local production for local business initiative for
manufacturing and sales in predicting areas ofhigh demand from a global perspective.
As a result of this approach we were able toachieve solid business results, with consolidated
sales for this term of ¥195.9 billion (up by 10.2%
on the previous year) and operating income of¥17.2billion, a decrease of 4.8% on a consolidated basis, due to an increase in sales andadministrative expenses.
The current fiscal year is the final year of the
10-year business plan that was inaugurated byour group of companies in 2000. We just missed
out on achieving our initial targets, however if we
consider the impact of the sudden strong yen
and an unprecedented natural disaster, it is anachievement that on the whole our targets weremet.

With regard to the impact on the Nipro
Group of Companies of the Great East Japan
Earthquake, some of our business locations
sustained some damage and production was
temporarily halted at 7 locations including Nipro
Corp's Odate Plant and Nipro Pharma Corp's
Odate Plant, however the damage sustained at
our mainstream plants was relatively light and all
our locations, with the exception of the Tohoku
Pharmaceutical Corporation’s Kagamiishi Plant,
have recovered and are operating at normal
levels.

Business Strategy
We are redoubling our efforts into our global
development with the aim of attaining ourlong-term goals of ¥500 billion in consolidated sales by fiscal 2020 and growing thisto ¥1 trillion by fiscal 2030.
We have set a long-term target of becoming agroup of companies with consolidated sales of¥1 trillion in fiscal 2030 as part of our management vision. Our intermediate target is ¥500
billion in consolidated sales and ¥40 billion inconsolidated ordinary income by fiscal 2020. In
order to meet these goals, we are planning on
achieving definite growth in all our business fields
related to our medical, pharmaceutical, glass andmaterials businesses.
Our fundamental strategy is to strive to gain
global market share and expand our sales,
improve our cost competitiveness, rapidly
improve our manufacturing capabilities in products where we expect demand to increase andto make the BOP* our target demographic, agroup that consists of some 70% of the world's
population.
Firstly, with regard to our medical equipment
business, we will strongly promote the enrichment of our product lines as well as opening up
new sales channels for our diabetes-related
products, etc. in addition to our core products,
such as the dialyzer (artificial dialysis equipment),
and other products related to dialysis. Moreover,in order to meet local needs we are establishing
new plants in countries with a growing economy
such as India, China, Indonesia, Bangladesh,etc., reinforcing our direct sales systems in theselocations as well as creating robust manufacturing and sales systems suitable for each region.
With regard to our business of the contracted manufacturing of pharmaceutical products, as one of the top-class corporate groups
leading the Japanese domestic market for*BOP:
Acronym for “Bottomof the Pyramid”. Thisrefers to the global
population subsistingon low incomes.

Nipro Corporation Annual Report 2011 6

*DPC:
Acronym for "Diagnosis
Procedure Combination",a blanket payment
system for charges
accrued following
hospitalization for anacute condition.

contract manufacturers of pharmaceuticals, weare looking to construct manufacturing facilities inareas were growth is predicted, such as biopharmaceutical products, anti-bacterial agentsand anti-cancer drugs to name but a few.
With regard to generic drugs, we havecontinued to pour our efforts into a variety ofchannels to market, such as DPC* hospitals,
dispensing pharmacy groups, etc. as well as
bolstering our manufacturing facilities anddistribution systems so that we can ensure astable supply of product, in addition to thedevelopment of new items. Moreover, looking
overseas and going forward, as there is a great
opportunity with the expansion in demand forgeneric drugs, in order to be able to meet theseneeds we are moving forward with securing thenecessary permissions or approvals in eachcountry and striving to be first to secure market
share in each country.
With regard to our glass and materials
business, we have been promoting the establishment of processing technology as well as technical breakthroughs with regard to glass items for
medical use. We will expand our sales to pharmaceutical companies overseas, not to mention
domestic pharmaceutical companies. Moreover,
we also plan to strengthen our links with Nippon
Electric Glass Co., Ltd., a company we have had
a long-standing relationship with for many years,
through increase capital and personnel links, aswell as pressing forward with expanding the sales
and development of more glass items, including
those for medical use. Going forward, we will
look to make decisive affiliations and M&A
decisions both at home and abroad in order togrow this business field one of the mainstays of
our Group of companies.
Foreign currency exchange risk was one
reason for the reduced profits for the term underreview and in order to plan to disperse andreduce this risk, since April 2011 we havedecided to implement direct shipping transactions between our overseas group plants andoverseas sales companies.

Dividend Policy
Based upon the Nipro Group dividend policyof a 50% payout ratio on a unitary basis, ourdividend for the fiscal year was ¥50 per
share.
One of the most important management policiesof the Nipro Group is the return of profits andprofit-sharing is conducted in accordance with a

7 Nipro Corporation Annual Report 2011

sliding scale based on the results of the business.
In accordance with this sliding scale approach, the basis of which is a proper set of
performance-based rules to decide profit-sharing
amongst shareholders, employees and senior
management, the dividend policy of the Nipro
Group is to aim at a 50% payout ratio on aunitary basis.
This year, the Nipro Group paid an interim
dividend of ¥18.5 per share. At the end of the full
fiscal year, the year-end dividend was paid at¥31.5 per share, giving a total dividend for the
fiscal year of ¥50 per share.
We also plan to pay dividends based on this
dividend policy in the next fiscal year as well.

Prospects for the Next Fiscal Year
By setting our sights firmly on our targets
for fiscal 2030, we will move forward
steadily to expand our manufacturing
capabilities, improve our cost competitiveness and improve our business performance.
The Japanese domestic economy faces decreasing demand due to a low birth rate, anageing society and a shrinking population, in
addition to the impact of the Great East Japan
Earthquake which struck in March this year, so
there are concerns for what could be a long-term
downturn for the Japanese economy. Moreover,with regard to the foreign exchange markets, we
do not see any factors that could alter theunderlying trend of a long-term high yen.
On the other hand, if we look at the rest of
the world, it is predicted that economies of theemerging nations such as China and India willcontinue to show large-scale growth. So even if
the Japanese economy appears stifled andstalled, we are welcoming in a dynamic era with
unprecedented upheaval in terms of the global
marketplace, centering on Asia.
The Nipro Group is convinced that further
expansion of its business results can beachieved by setting its sights on taking as broada view as possible and setting a fundamental
course to promote the BOP-centered approachof ‘local production for local business’, as well as
expanding our glass and materials business.
As a result the Nipro Group projects sales of¥213.0 billion, an operating income of ¥16.4
billion (down by 4.5% on the previous year) on aconsolidated basis and these are targets that we
feel are sufficiently possible to achieve.

Striving to be the Best in our
Business
By emphasizing speed and timing, we areaiming to become top in our field as we
continue to undertake bold challenges.
The speed of change with regard to the global
economy will become increasingly rapid as wemove forward.
In order to ensure that the Nipro Group isable to survive the turbulent times ahead and to
not let any opportunities pass by, the emphasis
has to be on speed and timing. The Nipro
Group is actively engaged in global development, investment in facilities as well as pushing
forward with cost reduction.
Moreover, in order to establish a base foreach of our business fields of medical, pharmaceutical, glass and materials and grow them
globally, we will make rapid and bold M&A
decisions and stick to managing our businesses
with an emphasis on speed.
Furthermore, by working to do away withthe barriers between races and nations, andjoining hands with local people, we are reinforcing our Win-Win relationships as well as strivingnight and day to achieve our mission by responding to global needs, not to mention thedomestic market, through the mass-productionof reasonably-priced, high quality products.
We hope that our shareholders andinvestors will look forward to our future progressand results, and we would also like to ask you
for your continued support.
July 2011

Minoru Sano
President

Nipro Corporation Annual Report 2011 8

Research and Development

Promotion of research and development of both medical equipment
and pharmaceutical products is central to the NIPRO Group.
Naturally we are trying to achieve higher quality and improved
functionality with our existing product areas, as well as making visible,
steady progress towards researching and developing new areas.
The development of a cell-culturing system has made progressunder the cooperation system of industry, government and academia,
and now thanks to our studies of stem cells in umbilical blood, thedevelopment has reached the stage where it is taking shape.
In terms of artificial organs, our range of implanted ventricularassist devices, developed in cooperation with an American company,
are currently at the application stage here in Japan.
With regard to our pharmaceutical products, in addition to ourregular development of generic drugs, we are actively promoting thedevelopment of high value-added products such as kit preparations,which are highly convenient for use in clinical practice and can reduce
the risk of medical malpractice, as well as our easy-to-swallow orallydisintegrating tablets.
Moreover, we are making progress with our development of
anticancer drugs and biosimilar items with production lines held by
our group for each kind of preparation. We are contracted to produce
pharmaceutical products and one part of this work is to design thepharmaceutical formulation of new drugs.
In this consolidated accounting year, the total cost of R&D activity
was 4.9 billion yen (US$ 59.8 million).

For our cardiovascular catheter-related products, there weredevelopments in new PTCA balloon catheters (SIDEKICK OZMA™),
thrombus capture catheters (FILTRAP™), guiding catheters(AUTOBAHN™), micro catheters, thrombus aspiration catheters(TVAC™) and stents.
For our endovascular catheter-related products, development
moved forward with regard to our hot balloon catheter system,
peripheral stents, new PTA catheters (FINESTREAM™,RAPIDSTREAM™) and our drug-eluting balloon.

1. Medical businessWe are developing regenerative medicine-related products suchas bag systems for culturing cells, bag systems for preserving cells
as well as regenerative medicine products that stimulate and takeadvantage of the self-healing abilities of tissues and organs.
Our development program made progress in nerve-regeneration
tubes, pericardium regenerative support membranes, new-type cell
culture bags filled with medium (CULTUREBAG™) and cell freezing
containers (FROZEBAG™).

The following research and development activities are performed
mainly through the Company’s own Research and Development
Laboratory.

General-Purpose Medical Equipment
The Company undertakes research and development in areas related
to infusions, catheters, fertility treatment, safety-related products andmedical equipment for testing and treating diabetes.
For infusion-related products, development focused on ourneedleless infusion system, a needleless three-way stopcock with achemical resistant connector, as well as our infusion pump sets.
For catheter-related products, we developed antithrombotic central
venous catheters, catheters for new-born and premature infants,
multi-lumen seldinger catheters as well as peripheral-vein centralvenous catheters.
Our development of fertility treatment-related products focused on
Oocyte aspiration needles, embryo transfer catheters, sperm injection
catheters as well as artificial insemination by husband catheters.
With regard to safety-related products, our development
program includes SAFETOUCH™ AVFs, SAFETOUCH™ PSVs and
SAFETOUCH™ CATHs .
With regard to clinical testing products, our development program
looked at blood collection needles with flash-back functionality.
For diabetes treatment-related products, our development focusedon safety lancets (LIGHTSHOT SLIM™).

Intervention-Related Medical Equipment
Our development program resulted in the introduction of circulatoryorgan-related medical equipment used in intervention treatment anddiagnosis.

9 Nipro Corporation Annual Report 2011

Artificial Organ-Related Medical Equipment
The Company continued to focus on its core products in the fieldof artificial kidney-related equipment as well as engaging in thedevelopment and introduction of products such as artificial heartlungs and heart-related medical equipment used in the treatment ofcirculatory and respiratory organs.
With regard to our artificial kidney-related products, we workedon the development of dialysis machines, dialyzers, blood accessproducts and blood circuits.
With our artificial heart- and lung-related products, progress
was made in developing extracorporeal membrane oxygenators,
extracorporeal circuits, centrifugal blood pumps, venous reservoirs,
hemoconcentrators, PCPS kits, venous and arterial cannula andimplantable ventricular assist devices.

Regenerative Medicine

Pharmaceutical Containers
In cooperation with several pharmaceutical companies, ourPharmaceutical Research Center developed medical equipment
as well as kit containers for equipment and pharmaceuticals. This
included double-bag kits for various pharmaceuticals and pre-filled
syringes, an exposure prevention device kit for cancer drugs as wellas influenza test devices.

In-Vitro Diagnostics (IVD)
The Company developed new IVD’s useful for early diagnosis andmonitoring the effects of treatment, as well as a testing systemthat uses medical device technology to enable simple tests to be
carried out. The new system tests for Alzheimer’s disease, diabetic
nephropathy, drug-resistant tuberculosis, nutrition assessment anddiabetes mellitus.
We have carried out active developments of next-generation
regenerative medicine and cell-gene therapy with consistent quality
control from research to manufacture and unique and reliable
technology. We will also work hard from the viewpoint of global
product development.
The total amount of research and development costs in thisdivision for the current fiscal year was ¥2.1 billion (US$25.1 million).
*Based on an exchange rate of USD$1 = ¥83.15

2. Pharmaceutical Business
The following research and development activities were undertaken,
mainly at our Pharmaceutical Research Center.

drug products. Our products meet current medical needs, such as
our high valued-added drugs like the injectable preparations in kit form
(kit preparations), our orally-disintegrating tablets and our low-dose
requirement drugs.

Development of Generic Drugs

Anticancer Drugs and Biosimilar Medicines

Injectable drugs are a specialty of this Company and as such weplaced 6 products (using 3 integral elements) on the market including
4 products of pre-filled blood coagulation inhibitor syringes which areused during dialysis.
In the next year, we plan to set 7 products (using 3 integral
elements) on the market as detailed below. We have placed 1 product(using 2 integral elements) on the market for pre-mixed bag solutions
combining drug and infusion solutions, where the concentrationsof the solutions can be altered in advance to prevent incidents ofmedical malpractice in treatment. We set 2 products (using 1 integral
elements) for the double-bag (liquid-and-powder) antibiotic drug
market, and 3 products for pre-filled syringes.
We also plan to expand our sales of oral drugs, and now we sell 9
products (using 5 integral elements), including 1 product of low-dose
drugs (half-tablet drugs) for elderly persons with renal deficiencies ordrug metabolism disorders, patients suffering from functional disorders
and health workers such as pharmacists working at medical facilities.
In the next year, we plan to add 14 products (using 6 integral
elements) including 3 easy-to-swallow orally-disintegrating tablet
products (using 2 integral element).
With regard to our external preparations, we plan to launch 1 tapeproduct on the market in the next year that provides pain relief at thelocation of the needle puncture during dialysis. Our tape products
have high degree of adhesiveness coupled with low self-adhesive
properties. We have plans to develop a Trans-dermal Therapeutic
System (TTS) preparation which will deliver a pharmaceutical throughthe skin to the blood flow circulating round the entire body.
As a Company, we combine our formulation technology with ourexpertise in medical containers to facilitate the timely development of

We plan to join the fields of anticancer drugs and biosimilar medicines.
As for anticancer drugs, we will start to promote our products after
fiscal 2013. Moreover, concerning biosimilar medicines, we havestarted development with a view to launching on the market following
fiscal 2016. Both product lines are scheduled to be manufactured on
the Nipro Phama Corporation’s new production line.

Application of New Generic Formulation Technologies
We are active in the applied development of new technologies thatavoid the breakup of peptides and proteins that often occurs withoral administration as well as researching DDS technologies using
liposomes as well as alternative, non-oral administration systems.
Moreover, as an application of liposomes technologies, we promote todevelop artificial oxygen carriers shaped hemoglobin capsular under
the cooperation of industry and academia.

Contracted Research and Development
Along with the sale of generic pharmaceutical products, contracted
manufacturing of pharmaceutical products has become core to ourpharmaceutical business. Our approach to contracted development
starts at formulation and encompasses contracted manufacturing ofapproved pharmaceutical products. In this fiscal period, we started
contracted manufacturing trials for two companies and made some
progress in our negotiations with several pharmaceutical companies.
The total amount of research and development costs in thisdivision for the current fiscal year was ¥2.9 billion (US$34.7 million).

Research and Development Laboratory
Nipro Corporation Annual Report 2011 10

Global Activities

Our expansion into emerging
economies is in full swing, as
we look to establish a system of
local manufacturing backed by
local sales.

Sales Ratio by Region (FY2011)

6.7%
10.6%
America 19.0%
Asia

EuropeTotal Sales

195,943

Today, Nipro owns companies andbranches in about 60 locations throughout Europe, Asia and North and SouthAmerica. We have gained a leading
share in the global artificial kidney(Dialyzers) market and have an outstanding reputation for high quality
products all over the world.
Although overseas sales accounted for just 36.3% of consolidated
sales for the Nipro Group in FY2010(year ending March 31, 2011), overseas
sales of core products, including
Dialyzers, accounted for more than halfof the sales of our medical equipment
division.
We will work aggressively toincrease overseas sales. We will achieve
our growth objectives by establishing(Millions of yen)Domestic 63.7%

Jilin Nipro Jiaheng Pharmaceutical Packing Co., Ltd.
Chengdu Pingyuan Nipro
Pharmaceutical Packing Co., Ltd.
Nipro Trading (Shanghai) Co., Ltd.
Nipro India Corporation PVT. LTD.
Shanghai Nissho Vacuum
Flask Refill Co., Ltd.
Nipro Medical (Hefei) Co., Ltd.
Nipro Sales (Thailand) Co., Ltd.

Nipro Asia Pte. Ltd.

Nipro Europe N.V. Belgium Head Office

MedicalGlass & Materials
Nipro Glass India Limited

11 Nipro Corporation Annual Report 2011branches and expanding our sales
network in emerging market economies
where we expect that large population
to drive medical needs to continue torise. We will also increase our sales
capabilities by expanding our sales
force worldwide.
In China, we will establish 10 new
branches for a total of 20 branches andwe will increase the size of our sales
force to 100 people. Likewise, in India
we will triple our sales force to 80
people this year.
Moreover, new plants are underconstruction in China, India, Indonesia
and Bangladesh in order to takeadvantage of local product development, production and supply. We will
establish a local production system inmarkets expected to experience highgrowth where we will deliver low-cost,high-quality products.

Our dialysis, diabetes and artificial lungrelated products are all performing wellglobally and we will continue to develop
this global market. In the diabetes
segment, the strategic acquisition of US
company Home Diagnostics, Inc., (nowNipro Diagnostics, Inc.,) in March 2010
has allowed us to aggressively enter
into the blood glucose meter andancillaries market.
We will increase our overseas
blood glucose monitoring system
market penetration by leveraging ourglobal sales network which will start tosell the blood glucose meter and related
products worldwide. To date, themarket for these products had mainly
been developed for North America.
As for our artificial lung set, we
anticipate the performance upgrades
and more competitive cost, will drive an
increase our global market share. Our
new artificial lung product range will belaunched in 2011.

As for our Glass & Material business,
we promote joint ventures with local
companies in areas or countries worth
projected increases in population andstable needs. We encourage local
production and sales of high-quality andlow-cost pharmaceutical glass products
based on our production techniquecultivated through our glass-related
business. The manufacturing and salesof ampoules, glass bottles and glass
tubes have started in China and India.
As we consider entering into otherglobal markets where demand is
expected to grow, we will strive toexpand this business globally in thesame manner as our medical business.
As in 2010, we will continue to promote
globalization in 2011.

Nipro Diagnostics Inc.

Nipro Medical Corporation Miami Head Office
Nipro (Shanghai) Co., Ltd.

Nipro (Thailand) Corporation Limited

Nipro Medical Ltda.

Nipro Corporation Annual Report 2011 12

Plant and Equipment

1 Overview of Capital Investments, etc.
The Group (the Company and its consolidated subsidiaries) has
focused on investing in research and development and productareas where growth can be expected in the future for energy
efficiency, rationalization, product quality improvement, and increasing
production capacity.
Capital investment (tangible fixed assets on an acceptancebasis; figures shown do not include consumption tax, etc.) during
this consolidated fiscal year totaled ¥21.7 billion (US$261.4 million).
Capital investment by business segment is shown below.
The medical business segment made capital investments toincrease production capacity and for production rationalization at theCompany’s Odate plant and the Thailand plant of Nipro (Thailand)
Corporation Ltd.
The pharmaceutical business segment made capital investments
for injectable preparations in kit form at the Odate plant and infusion
solution preparations at the Ise plant; both plants are owned and run
by the Nipro Pharma Corporation. Furthermore, the Tohoku Nipro
Pharmaceutical Corporation made capital investments related to newcontract manufacturing projects for oral drugs.

The glass & materials business segment made capital investments
for glass prefilled syringes at the Company’s Otsu plant and molds forrubber stoppers.
Elimination and corporate capital investments were made primarily
in equipment and devices for research and development at thePharmaceutical Research Center and Research and Development
Laboratory.
The required funds were allocated from owned capital and loans.
There was no material retirement or disposal of plants andequipment.
Millions of yen
Medical··········································
Pharmaceutical······························
Glass & Materials···························
Adjustment····································
Total··············································¥¥

14,4586,723
95
458
21,734

Thousands of
U.S. dollars$ 173,879
80,854
1,143
5,508$ 261,384

2 Status of Major Plant and Equipment(1) Reporting Companies
As of March 31, 2011
Book Value (Millions of yen)
Name of Facility
Name of Segment by
Type of Asset(Location)
Business Category
Buildings and Structures Machinery and equipment Land (Area m2) Construction in progress
Odate Plant
Medical
Medical Equipment¥ 9,497¥ 15,095
¥
961
¥
466
Production Facilities, etc.
(198,026)(Odate, Akita)
166
126
25
61
Otsu Plant
Glass & Materials Glass Tube Processing
Production Facilities, etc.
(4,604)(Otsu, Shiga)—
Tokyo Office
Glass & Materials Sales Facilities
258
47
1,974
(Bunkyo-ku, Tokyo)(377)
Domestic Operations
MedicalSales Facilities
390
711
357
11
21 Branches and(2,566)33 Sales Offices in Japan
Research and Development
Other or Corporate Research and Development
1,981
588
467
—
Laboratory & Pharmaceutical
Plant and Equipment, other(26,544)
Research Center (Kusatsu, Shiga)
Headquarters
MedicalOther Plant and Equipment
345
389
1,508
—
(Kita-ku, Osaka)
Glass & Materials(1,891)
Corporate
Other Plant and Equipment
1,213
2
4,970
—
Leased Assets, Other
Other(Settsu, Osaka, Other)(54,065)		 [21,372] *Note:(1)Book Value (Thousands of U.S. dollars)Name of Facility
Name of Segment by
Type of Asset(Location)
Business Category
Buildings and Structures Machinery and equipment Land (Area m2) Construction in progress
Odate Plant
Medical
Medical Equipment$ 114,215$ 181,540$ 11,557$ 5,604
Production Facilities, etc.
(198,026)(Odate, Akita)
1,996
1,515
301
734
Otsu Plant
Glass & Materials Glass Tube Processing
Production Facilities, etc.
(4,604)(Otsu, Shiga)—
Tokyo Office
Glass & Materials Sales Facilities
3,103
565
23,740(Bunkyo-ku, Tokyo)(377)
Domestic Operations
MedicalSales Facilities
4,690
8,552
4,293
132
21 Branches and(2,566)33 Sales Offices in Japan
Research and Development
Other or Corporate Research and Development
23,824
7,072
5,616
—
Laboratory & Pharmaceutical
Plant and Equipment, other(26,544)
Research Center (Kusatsu, Shiga)
Headquarters
MedicalOther Plant and Equipment
4,149
4,678
18,136—(Kita-ku, Osaka)
Glass & Materials(1,891)
Corporate
Other Plant and Equipment
14,58825
59,771—
Leased Assets, Other
Other(Settsu, Osaka, Other)(54,065)		 [21,372] *Note:(1)13 Nipro Corporation Annual Report 2011

Total
¥ 26,019

Number of employees(People)
1,143

378

33

2,279

20

1,469

631

3,036

232

2,242

176

6,185

—

Total
$ 312,916

Number of employees(People)
1,143

4,546

33

27,40820

17,667631

36,512

232

26,963

176

74,384—

(2) Domestic subsidiaries
As of March 31, 2011
Companyof Segment
Name of Facility Name
by BusinessType of Asset(Location)category

Nipro Medical
Industries Co., Ltd.
Nipro Pharma
Corporation

Tatebayashi Plant Medical(Tatebayashi, Gunma)
Ise Plant
Pharmaceutical(Matsusaka, Mie)
Odate Plant
Pharmaceutical(Odate, Akita)
Tohoku Nipro
Kagamiishi Plant PharmaceuticalPharmaceutical (Kagamiishi-machi,
Corporation
Iwase-gun, Fukushima)
Zensei Pharmaceutical Kishiwada Plant
PharmaceuticalIndustries Co., Ltd.
(Kishiwada, Osaka)
Nipro Patch Co., Ltd. Kasukabe Plant
Pharmaceutical(Kasukabe, Saitama)
Hanyu Plant
Pharmaceutical(Hanyu, Saitama)Company

Medical Equipment
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities

of Segment
Name of Facility Name
by BusinessType of Asset(Location)category

Nipro Medical
Industries Co., Ltd.
Nipro Pharma
Corporation

Tatebayashi Plant Medical(Tatebayashi, Gunma)
Ise Plant
Pharmaceutical(Matsusaka, Mie)
Odate Plant
Pharmaceutical(Odate, Akita)
Tohoku Nipro
Kagamiishi Plant PharmaceuticalPharmaceutical (Kagamiishi-machi,
Corporation
Iwase-gun, Fukushima)
Zensei Pharmaceutical Kishiwada Plant
PharmaceuticalIndustries Co., Ltd.
(Kishiwada, Osaka)
Nipro Patch Co., Ltd. Kasukabe Plant
Pharmaceutical(Kasukabe, Saitama)
Hanyu Plant
Pharmaceutical(Hanyu, Saitama)

Nipro Patch Co., Ltd. Hanyu Plant

Medical Equipment
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities
Pharmaceutical
Production Facilities

Book Value (Millions of yen)
Buildings and Machinery andLandConstruction in
Structures
equipment(Area m2)
progress¥ 1,273¥ 1,385¥521¥
4(15,462)
6,488
2,522
1,557
1,108
(104,764)
10,915
5,554
1,247
4,679
(195,468)
6,163
3,800
458
374
(83,841)
1,349

573

1,249

446

900

932

552
(21,357)
1,008(9,611)455(16,680)

3,183

364

11,675615

22,395547

10,795

187

273

2,747

281

241

2,944

117

16

2,303

52

Book Value (Thousands of U.S. dollars)
Buildings and Machinery andLandConstruction in
Structures
equipment(Area m2)
progress$ 15,310$ 16,656$ 6,266$
48(15,462)
78,02830,331
18,725
13,325(104,764)
131,269
66,795
14,99756,272(195,468)
74,11945,701
5,508
4,498(83,841)
16,224

6,891

15,021

5,364

10,824

11,2096,639(21,357)
12,123(9,611)
5,472(16,680)

Total¥

Number of
employees(People)Total

Number of
employees(People)$ 38,280

364

140,409615

269,333547

129,826

187

3,283

33,037281

2,898

35,406

117

192

27,69752

Zensei Pharmaceutical Industries Co., Ltd.
Nipro Corporation Annual Report 2011 14

(3) Overseas subsidiaries
As of March 31, 2011
Book Value (Millions of yen)of Segment
Name of Facility Name
by BusinessType of Asset Buildings and Machinery andLandConstruction in(Location)category
Structures
equipment(Area m2)
progress
Nipro (Thailand)
Thailand Plant
Medical
Medical Equipment¥ 3,349¥ 10,016¥267¥
10
Corporation Limited (Ayutaya, Thailand)
Production Facilities(159,148)
Nipro (Shanghai) Shanghai Plant Medical
Medical Equipment
903
1,771
—
345
Co.,Ltd.
(Shanghai, China)
Production Facilities		<40,681> *Note:(2)Nipro Medical Ltda. Brazil Plant
Medical
Medical Equipment
418
1,309
95
224
(Sorocaba,
Production Facilities(73,623)
Sao Paolo, Brazil)
Nipro Diagnostics, Fort Lauderdale Plant Medical
Medical Equipment
92
2,545 		
—166Inc.
(Florida, U.S.A)
Production Facilities		<39,533> *Note:(2)¥ 13,642

Number of
employees(People)
4,009

3,019

701

2,046

316

2,803

512

CompanyBook Value (Thousands of U.S. dollars)of Segment
Name of Facility NamebyBusiness
Type
of
Asset
Buildings
andMachineryandLand
Construction(Location)category
Structures
equipment(Area m2)
in progress
Nipro (Thailand)
Thailand Plant
Medical
Medical Equipment$ 40,277$ 120,457$ 3,211$120
Corporation Limited (Ayutaya, Thailand)
Production Facilities(159,148)
Nipro (Shanghai) Shanghai Plant Medical
Medical Equipment
10,86021,299—4,149
Co.,Ltd.
(Shanghai, China)
Production Facilities<40,681> *Note:(2)Nipro Medical Ltda. Brazil Plant
Medical
Medical Equipment
5,027
15,742
1,143
2,694(Sorocaba,
Production Facilities(73,623)
Sao Paolo, Brazil)
Nipro Diagnostics, Fort Lauderdale Plant Medical
Medical Equipment
1,106
30,608—
1,996
Inc.
(Florida, U.S.A)
Production Facilities<39,533> *Note:(2)Total$ 164,065

Number of
employees(People)
4,009

36,308701

24,606316

33,710512

Company

Total

Note:
(1) [21,372] is the area (m2) of major facilities leased to entities other than consolidated subsidiaries.
(2) <40,681> and <39,533> is the area (m2) of facilities leased from entities other than consolidated subsidiaries.
(3) The figures shown above do not include consumption taxes, etc.
(4) There are no major facilities currently in abeyance.
(5) Number of employees indicates the number of people employed.
(6) In addition to the above, the details of major facilities leased from entities other than consolidated subisidaries are shown below.

1) Nipro Corporation
Name of Facility(Location)
Headquarters(Kita-ku, Osaka)
Domestic Operations
21 Branches and
33 Sales Offices in Japan
Name of Facility(Location)
Headquarters(Kita-ku, Osaka)
Domestic Operations
21 Branches and
33 Sales Offices in Japan

Name of Segment by
Business category
MedicalGlass & Materials
Corporate
MedicalName of Segment by
Business category
MedicalGlass & Materials
Corporate
Medical15 Nipro Corporation Annual Report 2011

Type of Facilities
Host computer andPeripheral Equipment, etc.
Company Vehicles, etc.

Type of Facilities
Host computer andPeripheral Equipment, etc.
Company Vehicles, etc.

Major
Lease Period
5 Years

5 Years

Major
Lease Period
5 Years

5 Years

Annual Lease Payments(Millions of yen)¥
50

Lease Contracts Balance(Millions of yen)
¥
76

		

		

211

505

Annual Lease Payments
Lease Contracts Balance(Thousands of U.S. dollars) (Thousands of U.S. dollars)
$
601
$
914

2,538

6,073

3 Plans for New Construction or Disposal of Facilities(1) New Construction of Major Facilities, etc
The Reporting Company leads coordination of plans for new
construction of facilities to avoid duplicate investment across theGroup, since each individual consolidated subsidiary is principally
Company
Nipro Diagnostics,
Inc.

Location

Nipro India Corporation Maharashtra, Medical
Pvt. Ltd.
INDIA
Nipro Medical (Hefei)
Co., Ltd.

Hefei, Anhui, Medical
CHINA

Nipro Pharma
Corporation
Ise Plant
Nipro Pharma
Corporation
Odate Plant

Matsusaka,
Mie
Odate,
Akita

Nipro Diagnostics,
Inc.

Location
Florida,U.S.A

MedicalType of Asset
Blood Glucose Meters
SensorProduction Facilities, etc.
Medical Equipment
Production Facilities, etc.

Company

Florida,U.S.AName of Segment
by Businesscategory

responsible for setting their own capital investment plans. Plans for
new construction of major facilities are as shown below.

Planned Amount of Investment
Total AmountPaid-in Amount(Millions of yen)
(Millions of yen)
¥
2,369
¥
—
11,5482,896

Medical Equipment
Production Facilities, etc.

21,445—

Pharmaceutical

Infusion Solution Preparation
Production Facilities, etc.

2,976

1,003

Pharmaceutical

Biosimilar Medicines
Production Facilities, etc.

2,399

499

Name of Segment
by Businesscategory
MedicalType of Asset

Nipro India Corporation Maharashtra, Medical
Pvt. Ltd.
INDIA

Blood Glucose Meters
SensorProduction Facilities, etc.
Medical Equipment
Production Facilities, etc.

Nipro Medical (Hefei)
Co., Ltd.

Hefei, Anhui, Medical
CHINA

Nipro Pharma
Corporation
Ise Plant
Nipro Pharma
Corporation
Odate Plant

Matsusaka,
Mie
Odate,
Akita

Means ofFund Raising
Owned Capital

34,829

Medical Equipment
Production Facilities, etc.

257,907—

Pharmaceutical

Infusion Solution Preparation
Production Facilities, etc.

35,791

12,063

Pharmaceutical

Biosimilar Medicines
Production Facilities, etc.

28,851

6,001

Month and Yearof Planned
Completion

June 2011

June 2014

Loans, Investment Funds
January 2011
from the reporting company
and Owned Capital
Loans, Investment Funds
July 2011
from the reporting company
and Owned Capital
Loans andMarch 2010
Owned Capital

May 2012

Loans and
Owned Capital

January 2011

December 2011

Month and Yearof Construction
Start

Month and Yearof Planned
Completion

June 2011

June 2014

Planned Amount of Investment
Means of
Total AmountPaid-in AmountFund Raising(Thousands of U.S. dollars) (Thousands of U.S. dollars)$ 28,491$—
Owned Capital
138,882Month and Yearof Construction
Start

September 2012

January 2012

Loans, Investment Funds
January 2011
from the reporting company
and Owned Capital
Loans, Investment Funds
July 2011
from the reporting company
and Owned Capital
Loans andMarch 2010
Owned Capital

May 2012

Loans and
Owned Capital

December 2011

January 2011

September 2012

January 2012

Note: The figures shown above do not include consumption taxes, etc.

(2) Disposal of Major Facilities, etc
There are no planned disposals, etc., of major facilities.

Nipro Corporation and Nipro Pharma Corporation Odate Plant
Nipro Corporation Annual Report 2011 16

Issues Facing the Company

In addition to our efforts to restore and restart operations at the
Tohoku Nipro Pharmaceutical Corporation’s Kagamiishi Plant, which
was seriously damaged by the Great East Japan Earthquake, wewill also implement power saving measures across the company tocontrol power usage, organize a proper production schedule for eachbusiness location, as well as reviewing and adjusting work hours toensure stable supply.
With regard to our medical business, domestically we are planningthe development of products with the minimum adverse impact on theenvironment as well as medical safety-conscious (infection prevention)
design for transfusion related products, dialyzer, diabetes related
products and vascular-related products. Furthermore, we will work on
the development of products that are kind to healthcare professionals,
patients and the global environment, as well as leveraging our
products that meet market needs to positively develop markets andreinforce sales.
Overseas, due to the impact of currency exchange loss during thelast fiscal year, we began to ship directly between overseas plants andsubsidiaries starting this April in order to try to separate and diminish
currency exchange risk and secure profit. Moreover, new plants will
be set up sequentially in India, China, Indonesia and Bangladesh
and these plants will respond to local demand, which is undergoingsignificant growth. We also intend to make our system of direct sales
much stronger in each location as we strive to increase sales andprofit by focusing on diabetes-related products, where demand showna rapid increase.

17 Nipro Corporation Annual Report 2011

Regarding our pharmaceutical business, we will promote thedevelopment of generic anticancer drugs and the construction ofa production system, in addition to the moving forward with theconstruction of a production system for our biomedical drugs as wellas the development of our biosimilar drugs in order to revitalize ourown production base, joint-venture development projects and ourcontracted manufacturing business.
As for our material business, we will continue to drive to establish
and innovate in the field of glass processing technology and look to
expand our sales not only to domestic pharmaceutical companies
but also to companies overseas. With regard to developing
markets overseas, we will promote joint venture businesses andstrive to increase sales and profits through production control andimprovements in quality.

Status of Corporate Governance, etc.

1 Status of Corporate Governance(1) System for Corporate Governance(3) Status of the Risk Management System
The Company has established risk management regulations and asystem for managing business risk and other individual risks in orderto recognize and grasp in an appropriate and comprehensive manner
risks that could have a material impact on business operations.
In order to effect management across all companies in the Group,
the Company has established a Management Risk Control Committee
and works continuously to further strengthen the system for promoting
management of business risk, so as to prevent, avoid and stop therecurrence of risks and crises.
Furthermore, the Company has established a Sanction Committee,
chaired by the President, which endeavors to ensure sound business
management through the appropriate handling of sanctions.

Meeting of Shareholders
Election

Accounting
Auditor(Auditors)
Board ofAuditors(Directors)
Board ofDirectors

Committees

Decision-making
Accounting
Audit

Operational
Audit

Supervisionof Directors’
executionof duties

President

Directorwithresponsibility
for operation
Division General Manager,
Manager, Assistant Manager

Management Risk Control Committee(2) Status of Internal Control Systems
The Company’s basic policy for internal control systems, as stipulated
in Article 362, Paragraph 5 of the Companies Act, was approvedat the Board of Directors meeting convened on April 29, 2006, andimplemented from May 1st of the same year.
The Company endeavors to establish business units as thefoundation of its internal control systems for the entire NIPROGroup. The Company’s directors and statutory auditors, as well as
representatives of each of the major companies of the group, holda Group management meeting on a regular monthly basis to reporton the progress of business operations, decide important operating
matters, and deliberate on pending matters.
To build awareness of and compliance with the laws, regulations,and corporate ethics among executives and employees, the Company
is active in the dissemination and promotion of compliance by creating
and archiving compliance handbooks and manuals of compliance on
the corporate portal site, implementing an internal reporting system tocollect and react to risk data, and distributing appropriate information
via net chat boards and the intranet.
These internal control systems, which are aimed at the executives
and employees of each company in the NIPRO Group, are operated
as a consistent management mechanism with an aim to ensure closemutual collaboration.

Conceptual Diagram of Corporate Governance

Third Party (i.e. lawyer, accountant)(1) System for Corporate Governance and the Reasons Why
this System has been Implemented
The NIPRO Group has established a corporate governance systemwith appropriate organizations in accordance with the Companies
Act, such as the General Meeting of Stockholders and directors of
the Company, in addition to the Board of Directors, statutory auditors
and the Board of Auditors and an Accounting Auditor, as well as
establishing internal committees such as a Management Risk Control
Committee, which continuously maintains close coordination withexternal parties such as the company attorney, etc., and is structured
so as to be able to observe and give direction about the efficiency andappropriateness of its operations over the NIPRO Group as a whole.
The NIPRO Group has diversified its business and established
an independent management system for each division from theoutset. Based on the management system of each business unit,
mutual collaboration and internal controls are effectively exerted
on the integrated operations of the NIPRO Group, and with clear
responsibilities and a strengthened management system, thecorporate governance system mentioned above works effectively as aclassic and consistent management system for the NIPRO Group.

(4) Condition and Status of the Company’s Organizational
Content and Internal Control Systems(2) Status of Internal Auditing and Audits by Statutory
Auditors(1) Internal Auditing
The Company has established an Internal Audit Division, consisting ofan Audit Office and an Overseas Audit Office and is conducting auditsof accounting, procedures, and other operations based on internal
audit protocols.
Aside from the two full-time employees in the Internal Audit
Division, employees are dispatched as necessary from the Head
Office Management Division or other divisions to carry out inspections
in a timely, smooth and efficient manner.
In regards to implementation of specific audit operations, audits
are carried out in accordance with audit policies and audit plans thatare established each fiscal year, and the Company endeavors toensure smooth accounting audits and audits by statutory auditors
through mutual collaboration between said statutory auditors and our
accounting auditors.
(2) Audits by Statutory Auditors
For audits by statutory auditors, in accordance with the auditing policy
and the division of labor as agreed upon by the Board of Auditors,
each statutory auditor attends important meetings, including Boardof Directors meetings, and receives reports from Directors andemployees and requesting further explanation when necessary, in
addition to inspecting important documents as well as undertaking
other auditing duties such as investigating the actual condition ofoperations and assets, etc. The statutory auditors hold Board ofAuditors Meetings regularly, or as necessary, in order to exchange
views and hold discussions.
Nipro Corporation Annual Report 2011 18

(3) External directors and external auditors(4) Remuneration paid to Directors and Auditors(1) External auditors
At present, two of the three Auditors are external auditors, one ofwhom is indentified as an independent director.

(1) The total amount of remuneration, the total amount of
remuneration by type and the number of directors andauditors eligible for remuneration are shown in the tablebelow.

(2) External directors
The Company does not have an external director.
<Reasons why the Company does not appoint external directors>
Due to their prior professions, the 2 external auditors have a profoundknowledge and insight for business management and they receive
reports on the status of operations of directors and employees via
the full-time auditor, especially on the matters which could have amaterial impact on the group and the status of performance of theinternal audit. Therefore, they are constantly able to independently
and objectively conduct the audit and attend meetings of the Boardof Directors to make appropriate statements or offer advice, so thatthey sufficiently perform the function and role expected of external
directors.
(3) Personal, capital, transactional or other interests between
the Company and External Auditors.
There are no particular interests and relations between the Company
and the 2 external auditors.
(4) The function and role of the External Auditors in thecorporate governance of the NIPRO Group.
External auditors are expected to utilize their profound knowledge
from past experience of business management and apply this tothe examination of the management of the NIPRO Group from a
broader perspective. With close collaboration with the internal auditor,
employees of the Auditing Section, auditors of subsidiaries andaccounting auditors, they are able to audit from an objective position
so as to ensure the effectiveness of an integral and effective audit
function over the NIPRO Group as a whole.
(5) Company’s opinion regarding the status of the election ofExternal Auditors
Close coordination with the full-time auditor, employees of the Auditing
Section and assigned staff from the management section of the head
office (as needed) provides sufficient collateral to ensure that the audit
function and role as required by the system of corporate governanceis implemented.
In the event that number of auditors falls below the legal minimum,
we have taken the precaution of electing a sub-auditor who meets therequirements to qualify as an external auditor.
When needs arise to improve the audit function in accordance withbusiness developments and future expansion, we intend to review
and enhance the audit system including an increase in the number ofauditors.
(6) Mutual collaboration between External Auditors and theInternal Audit Division, audits by statutory auditors andaudits by accounting auditors and the relationship with ourinternal control organization.
External auditors attend important meetings such as the meeting ofBoard of Directors in accordance with the audit policy determined by
the Board of Auditors. External auditors also obtain reports from thefull-time auditor or directly from directors and employees and can also
inspect important documents, etc. They hold periodic or occasional
meetings with the Board of Auditors and discuss and exchange theirfair and independent opinions.
External auditors strive to facilitate a smooth audit service throughclose collaboration with employees of the auditing section, the fulltime auditor, auditors of subsidiaries and the accounting auditor.
19 Nipro Corporation Annual Report 2011

Millions of yen
Total amount of remuneration by type
Number of
Total amount ofeligible corpoAnnual
Retirement
remuneration
Bonus
rate officers
remuneration
benefits
¥ 360
¥ 106
¥ 209
¥ 45
31

Directors
Auditors
Excluding external
auditors
External auditors 		

6 		
2 		

6
2

—
—

—
—

1
2

Thousands of U.S. dollars
Total amount of remuneration by type
Number of
Total amount of
AnnualRetirement eligible corporemuneration
Bonus
rate officers
remuneration
benefits$ 4,330$ 1,275$ 2,514$ 541
31

Directors
Auditors
Excluding external
auditors
External auditors 		

72 		
24 		

72
24

—
—

—
—

1
2

(2) The total amount of remuneration etc. of each director andauditorAs there was no director or auditor whose total consolidated
remuneration exceeded 100 million yen, we are not required todisclose this information.
(3) Basic policy to determine the remuneration of directors• Director’s remuneration, etc.
Director’s remuneration is determined by the Board of Directors or isbased on certain standards decided by the Board of Directors.
Annual remuneration is determined considering the market rate
and the employee’s salary level. Bonuses are calculated by a certain
method based on the sliding scale system in accordance with theresults of the business. Retirement benefits are granted by the
resolution of the Board of Directors, up to a ceiling determined at theGeneral Meeting of Stockholders.
• Auditor remuneration
The annual remuneration is determined by mutual accord with theauditors.
At present, the total amount of remuneration for directors andauditors is determined by a resolution taken at the General Meetingof Stockholders as follows.
The total amount of remuneration for directors is up to 800 million
yen per year, based on the General Meeting of Stockholders held on
June 25, 2010.
The total amount of remuneration for auditors is up to 30 million
yen per year, based on the General Meeting of Stockholders held on
June 27, 2007.

(5) Status of shareholdings(8) Conditions for the Election of Directors(1) Investment in stock for which the purpose of the shareholding is other than pure investment
Number of brands: 34
Total amount on the balance sheet		¥86,171 million (US$1,036.3 million)

The Company’s Articles of Association stipulate that resolutions
pertaining to the election of directors must be carried by a majority of
votes at a General Shareholders Meeting attended by shareholders
entitled to execute one-third or more of shareholder voting rights.
Furthermore, the Articles of Association stipulate that resolutions
pertaining to the election of directors shall not be carried byaccumulative votes.

(2) Holding classification, brand name, number of shares,
balance sheet data for major stock brands held for otherpurposes other than pure investment
Brand

Number ofsharesNippon Electric Glass
56,967,602
Co., Ltd.
Mitsubishi Tanabe
7,642,700
Pharma Corporation
Mitsubishi Chemical
6,300,871
Holdings Corporation
Nichi-Iko Pharmaceutical
1,321,000
Co., Ltd.
Yuki Gosei Kogyo Co., Ltd. 3,685,000

Amount on thebalance sheet(Millions of yen)
67,108Amount on thebalance sheet(Thousands of U.S. dollars)
807,072

10,318124,089

3,295

39,627

2,834

34,083774

9,308

Resona Holdings, Inc.

375,992

149

1,792

Takeda Pharmaceutical
Company Limited
Zojirushi Corporation

23,62292

1,106

363,000

80962

138,315

53

637

6,545

34

409

Mitsubishi UFJ Financial
Group, Inc.
Aichi Bank

The purpose of shareholding of all brands shown in the above list is tomaintain and raise business relationship.
(3) Investment in stock for pure investment purposes
There were no applicable items.

(6) Status of Accounting Audits
Name of Accounting Auditor
Osaka Audit Corporation
Name of Certified Public Accountants conducting the Audit
Operational staff:
Yoshitsugu Hashimoto, Kouichi Aki, Kazuhiro Bando(9) Matters originally for Resolution of General
Shareholders Meetings which are authorized to beresolved by the Board of Directors(i) The Company’s Articles of Association, pursuant to Article 165,
Paragraph 2, of the Companies Act, provide that acquisition ofown shares by Market Transactions, as stipulated in Paragraph 1of the same Article, may be prescribed by a resolution of a Boardof Directors meeting in order to make possible the execution of an
expeditious funding policy.
(ii) The Company’s Articles of Association provide for distributionof Interim Dividends, as stipulated in Article 454, Paragraph 5,of the Companies Act, by resolution of the Board of Directors toshareholders, or registered pledgees of shares, who are recorded
in or listed on the final Shareholders Register as of September 30thof each year, in order to smoothly implement dividend policies.
(iii) The Company’s Articles of Association provide for exemption of
liability of directors and auditors (including persons who weredirectors or auditors) who have failed in their duties, to the extent
which such exemption may be given pursuant to the law andordinances, by resolution of the Board of Directors, as stipulated in
Article 426, Paragraph 1, of the Companies Act, in order to makepossible the full execution of the roles expected of directors andauditors.

(10) Conditions for Special Resolutions at General
Shareholders Meetings
The Company’s Articles of Association provide that special resolutions
at the General Meeting of Stockholders shall be carried by two-thirds
or more of votes at a General Meeting of Stockholders attended
by shareholders who are entitled to exercise one-third or more ofshareholder voting rights, as stipulated by Article 309, Paragraph 2, of
the Companies Act, to contribute to the harmonious management of
the General Meeting of Stockholders.

Support Staff for Audit Operations:Certified Public Accountants: 8 people
Assistant Certified Public Accountant : 1 person
Other staff: 2 people(7) Provisions in the Articles of Association related tothe maximum number of directors
The Company’s Articles of Association stipulate that the number of
directors shall be 40 persons or less.

Nipro Corporation Annual Report 2011 20

2 Details etc. of Auditors Remuneration

3 Dividend Policy(1) Remuneration for Certified Public Accountants, etc.
engaged in Accounting Audits

The Company considers providing stockholders a return of company
profits to be a very important aspect of management policy. This
basic stance is based on the idea that a company is an organization
composed of three parts: stockholders, employees, and management;
and that the profits from business operations should be properly
distributed amongst these three components.
As our basic approach, we have been aiming at a 50% payout
ratio on a unitary basis.
The Company’s basic policy is to distribute dividends of retained
earnings twice a year, with an interim dividend and a year-end
dividend. The interim dividend is determined by the Board of Directors
with the year-end dividend determined at the General Meeting ofStockholders.
Our dividends for the present year have been issued at a rate of¥50 per share, comprised of an interim dividend of ¥18.50 and yearend dividend of ¥31.50.
The Company believes that internal reserves are essential for
expanding our business base and for the long-term developmentof our business. The Company will actively invest these funds in themarketing, production, as well as the research and development
divisions, in order to ensure stable earnings and sustainable growth in
the future.
Through a decision of the Board of Directors, the provision of aninterim dividend was made possible in the articles of incorporation of
the Company and September 30 of every year was established as therecord date.
The dividends of retained earnings with record dates in the current
business year are as described below.

Millions of Yen
2011
2010
Classification Remuneration for
Remuneration
Remuneration for
Remuneration
Audit Certification
for Non-Audit
Audit Certification
for Non-Audit
Services
Certification Services
Services
Certification Services
Nipro corporation ¥
38
1
¥
38
—
Consolidated
15
—
14
—
Total
¥
53
¥
1
¥
52
—
Thousands of U.S. dollars
2011Classification Remuneration for
Remuneration
Audit Certification
for Non-Audit
Services
Certification Services
Nipro corporation $457$
12Consolidated
180
—
Total
$
637
$
12

(2) Other Important Remuneration
There were no applicable items.

(3) Non-Audit Services Provided by Certified Public
Accountants etc. engaged in Accounting Audit toReporting Companies
Non-audit service for which we remunerate certified public
accountants is to issue comfort letters about issuance of corporate
bonds.

(4) Decision-Making Policy for Audit Remuneration
There were no applicable items, however, remuneration was decidedin consideration of scale, specialty, number of audit days, etc.

Date of Resolution
November 11, 2010
June 28, 2011

Date of Resolution
November 11, 2010
June 28, 2011

21 Nipro Corporation Annual Report 2011

Amount of dividends
Millions of yen
¥
1,173
1,998

Dividend per share
Yen
¥
18.50
31.50

Amount of dividends
Thousands of U.S. dollars$
14,10724,029Dividend per share
U.S. dollars
$
0.22
0.38

Board of Directors and Auditors

President

Directors

Minoru Sano*

Akihiko Yamabe

Itsuo Akasaki

Accounting Division

Material Division

Kiyotaka Yoshioka

Kazuhiko Sano

Domestic Division

Research & Development Laboratory

Toshiaki Masuda

Akio Shirasu

Domestic Division/Research &Development Laboratory

Research & Development Laboratory

Managing Director

Yoshihiko Sano
Domestic Division
Managing Director

Makoto Sato
Pharmaceutical Business

Mitsutaka Ueda

Hiroshi Yoshida
Research & Development Laboratory

Domestic Division
Managing Director

Kazuo Wakatsuki
International Division

Tsuyoshi Yamazaki

Hiroshi Sudo
Research & Development Laboratory

International Division

Yusuke Kofuku

Takeo Kikuchi
Pharmaceutical Research Center

International Division

Hideo Okamoto

Kenichi Nishida
Pharmaceutical Research Center

Material Division

Toyoshi Yoshida
Masanobu Iwasa
Material Division

Quality Assurance & Regulatory
Compliance Division

Kyoetsu Kobayashi
Odate Plant
Standing Statutory Auditor

Yozo Sawada

Takayuki Nomiya

Intellectual Property Department
Statutory Auditor

Kimihito Minoura
Corporate Planning & Coordination
Division

Hideto Nakamura
Human Resources/General Affairs
Division

Masamichi Wada
Statutory Auditor

Kazumichi Irie
Spare Statutory Auditor

Kiyoshi Kase
Yasushi Kutsukawa
Domestic Division

Masayuki Ito
Domestic Division* Representative Director

Nipro Corporation Annual Report 2011 22

Financial Review

Overview
In the current period under review (year ended March 31, 2011), theglobal economy has transitioned towards an increasing sense ofrecession due to slow growth in Europe and the US added to politicalunrest in Middle Eastern countries, though developing countries
showed steady economic growth. On the other hand, Japanese
economy recovered gradually in the first half-year supported byexports to Asia and emergency economic measures. In the last halfyear, however, the strong yen and increases in the price of resources
depressed the economy, and following the Great East Japan
Earthquake of March 11, 2011 not only the Tohoku (NE Japan) region
but whole domestic economy is facing a severe situation.
With regard to the Group, some district offices were directly
affected by the disaster, and seven local plants (Nipro Corporation’s
Odate Plant, Nipro Phama Corporation’s Odate Plant, Nipro Medical
Industries Co., Ltd.’s Tatebayashi Plant, Tohoku Nipro Pharmaceutical
Corporation’s Kagamiishi Plant, Nipro Patch Co., Ltd.’s Kasukabe and
Hanyu Plants and Nipro Genepha Corporation’s Kasukabe Plant) weredamaged and ceased production. Currently all these plants, with the
exception of Tohoku Nipro Pharmaceutical Corporation’s Kagamiishi
Plant, have almost recovered total operational functionality.
Under these conditions, The Nipro Group aims to improve
production and sales as well as increase efficiency, in addition topromoting local production for local consumption in order to actively
improve our business performance.

Consolidated Business Results
Net Sales
In the year ended March 31, 2011, consolidated net sales amounted
to ¥195.9 billion (US$2,356.5 million), an increase of 10.2% comparedwith the previous fiscal year.

Net sales by Business Segment
Effective the fiscal year ended March 31, 2011, the Company applieda new accounting standard for disclosure related to enterprisesegments and related information issued by the Accounting Standards
Board of Japan. Net sales and operating income for the fiscal year
ended March 31, 2011 and 2010 have been calculated in accordancewith these new standards and they are reflected in the year-on-yearcomparison.
Medical BusinessWith regard to domestic sales, the market and business conditions
became severe as a result of the reduction in the official redemption
price of drugs and special treatment materials. Under thesecircumstances, we have made progress in increasing market shareand improving our sales efficiency. Sales grew greatly in vascularrelated products (such as thrombus capture catheters, micro stents
and angiographic kits), and we could see a consistent growth insales in our value-added products for avoiding medical accidents
and reducing infection risk, enteral-alimentation-related products,
environment-friendly products, dialysis-related products such as
artificial kidney (dialyzer), blood circuits, dialysis solutions and clinicaltesting products such as out glucose analysis device.

23 Nipro Corporation Annual Report 2011

As for our business overseas, we have been greatly affected by
the strength of the yen relative to the US dollar and Euro. However, wehave continued to actively promote sales in the Chinese, Asian and
Latin American markets, in addition to North America and Europe.
We were able to increase sales through our community-based sales
promotions.
Sales of our diabetes-related products grew considerably due
to our sales expansion into the global market, and dialysis-related
products (such as dialyzer, dialysis machines, blood circuits andindwelling needles) also showed positive sales growth thanks to ourcommunity-based sales promotions targeted at the dialysis market fordeveloping countries. Moreover, we began to construct four plants in
India, Indonesia, Bangladesh and China (Hefei) in order to construct
our global production system.
As a result, net sales of this business increased 12.1% from theprevious period to ¥132.8 billion (US$1,597.3 million).
Pharmaceutical BusinessThis business consists of two main divisions; the generic drugs
division, with its mission to provide low cost and high quality drugs,
and the contract manufacturing division, which offers high valueadded products to meet customer needs.
With regard to our sales of generic drugs, in accordance withgovernment policy for the dissemination of generic products: “thequantitative share for generic drugs shall be exceed 30% by theend of fiscal 2012.” In line with this statement the bonus points
system for dispensing generic drugs was implemented in April 2010.
Thus, while the market undergoes an expansion, we have beenproactively moving forward with our sales promotions to dispensing
pharmacy groups and have increased sales of oral drugs and drugs
for external use. In addition, injectable drug sales, our main product,
have grown steadily as a result of our detailed information service,
mainly to hospitals subject to the DPC system (Diagnostic Procedure
Combination; a comprehensive payment system for medical costs
incurred due to hospitalization for acute illness). Though we could not
avoid a decrease in sales due to a revision in drug prices (implemented
biannually), we were able to register significant sales growth, partiallybecause of strong sales of supplementary products listed lastNovember.
With regard to sales in our contract manufacturing business, wehave focused on getting contracts in oral drug sales, in addition to
injectable drug sales, since we completed construction of one of thelargest oral drug plants in Japan two years ago. In the current period,
our sales results exceeded the previous year’s results due to thesale of new products and an increase in shipment amounts mainly in
products launched during the previous period.
As a result, net sales of this business increased 10.1% from theprevious period to ¥38.0 billion (US$457.1 million).
Glass & Materials BusinessIn the field of glass and materials, domestic demand for glass tubes forampoules for pharmaceutical use decreased. Sales of glass tubes forbottles performed steady because the decrease in domestic demand
was covered by an increase in exports overseas. Furthermore, weestablished a new business based on glass for pharmaceutical use in
China and India, and commenced sales operations overseas. Glass
exports for thermos bottles had showed some signs of recovery

and the sales increased a little from the previous period. As for thesales of glass for lighting purposes, sales of glass tubes for electric
lamps increased due to positive conditions with regard to domestic
automobile production. However, sales of glass for LCD backlights
decreased due to the proliferation of LED products.
In the field of other pharmaceutical containers, sales of rubber
stoppers for pharmaceutical use increased steadily based on our
processing technologies for plastics, metal and rubber. However, salesof containers for combination products, bags for antimicrobial agentsand parts for pre-filled syringes decreased slightly.
As for medical preparation and administration-related devices,
sales showed a strong increase, and we are making progress inthe commercialization of our products through both proprietary
development and joint development with pharmaceutical companies,
so as to meet diverse needs. Furthermore, we continue to promote
contract manufacturing and development through cooperation withdomestic and foreign pharmaceutical companies with regard to
the general life-cycle management of pharmaceuticals, including
the development of combination products, systematization for selfinjection and modification of dosage form in the visual field.
As a result, net sales of this business increased 1.5% from theprevious period to ¥24.7 billion (US$ 297.1 million).
Other Business
Sales from real estate rental income decreased 6.5% from theprevious year to ¥0.4 billion (US$5.0 million).

Cost of sales
The cost of sales increased 9.2% compared with the previous period
to ¥137.8 billion (US$1,656.9 million). The main reason for theincrease was the addition of Nipro Diagnostics Inc. into the scope of
consolidation and the appreciation of the yen.
The ratio of cost of sales to net sales decreased 0.6 percentage
points compared with the previous period to 70.3%, mainly due to theaddition of Nipro Diagnostics Inc., which had a lower cost of sales ratio.
As a result, gross profit increased 12.6% compared with theprevious period to ¥58.2 billion (US$699.6 million).

Sales, General and Administrative expenses
Sales, general and administrative expenses increased 21.9%
compared with the previous period to ¥41.0 billion (US$492.5 million),
mainly as a result of the addition of Nipro Diagnostics Inc. into thescope of consolidation and an increase in the amortization of goodwill.

Operating Income
As a result of the above mentioned factors, operating income
decreased 4.8% compared with previous period to ¥17.2 billion(US$207.2 million). The ratio of operating income to net sales
decreased 1.4% percentage point to 8.8%, owing to an increase ofsales, general and administrative expenses.

Operating Income by business segment
Medical business
Operating income of Medical business decreased 7.5% comparedwith previous period to ¥18.4 billion (US221.7 million), resulting fromthe amortization of goodwill.

Pharmaceutical business
Operating income of Pharmaceutical business decrease 21.1%
compared with previous period to ¥1.7 billion (US$19.9 million),resulting from the reduction in the official redemption drug price.
Glass & Materials business
Operating income of Glass & Materials business decreased 13.0%
compared with previous period to ¥2.7 billion (US$32.5 million), due
to a stagnation of this business domestically.
Other business
Operating income of “Other” amounted to ¥0.09 billion (US$1.1
million), mainly from the sale of machinery.
Adjustment (Elimination/Corporate)
The unallocated corporate cost, which consisted mainly of the
R&D-related expenses and headquarters administration expenses,
decreased 20.3% compared with the previous period to ¥5.7 billion(US$68.1 million) mainly due to a decrease in experiment and researchexpenses.

Other income (Expenses)
We recorded other expenses of ¥9.8 billion (US$117.8 million)
compared with other expenses of ¥4.2 billion in the previous period.
In the period under review, we recorded ¥2.4 billion (US$29.4 million)
in exchange loss, increasing 435.7% compared with the previous
period, and ¥5.3 billion (US$63.3 million) in loss due to a disaster.

Income before income taxes and minority interests
As a result of the factors outlined above, income before income taxes
and minority interests decreased 46.4% compared with the previous
period to ¥7.4 billion (US$ 89.4 million).

Net sales and operating income by geographic segment
Japan
In Japan, net sales increased 4.9% compared with the previous
period to ¥146.3 billion (US$1,759.1 million) due to strong sales in our
Medical and Pharmaceutical businesses. Operating income decreased
3.6% compared with the previous period to ¥22.2 billion (US$267.0
million) due to the revision in reimbursement price.
America
In America, net sales increased 56.6% compared with the previous
period to ¥27.9 billion (US$335.9 million) due to the addition of
Nipro Diagnostics Inc. into the scope of consolidation. This segment
recorded an operating loss of ¥0.9 billion (US$11.4 million) which was
an increase compared with the operating loss of ¥0.08 billion in theprevious period,
EuropeIn Europe, net sales decreased 6.8% compared with the previous
period to ¥12.0 billion (US$144.6 million) due to appreciation of the
yen and against the euro. This segment recorded operating incomeof ¥0.1 billion (US$1.3 million) compared with the operating income of¥0.05 billion in the previous period.

Nipro Corporation Annual Report 2011 24

Asia
In Asia, net sales increased 25.9% compared with the previous period
to ¥9.7 billion (US$116.8 million) due to a steady expansion of sales in
the Asian market.
Operating income decreased 25.9% to ¥1.6 billion (US$19.5
million) because the plant production plants was tight due to anincrease in the cost of sales.

Financial Position
Total assets as of March 31, 2011 stood at ¥476.5 billion (US$5,730.7
million), an increase of 24.3% from the end of the previous period.
Current assets increased 20.6% from the end of the previous
period to ¥217.0 billion (US$2,610.0 million), due mainly to theincrease in cash and cash equivalents, trade notes and accounts
receivable and inventories.
Property, plant and equipment, net of accumulated depreciation,
stood at ¥128.5 billion (US$1,545.5 million), slightly increased by 3.5%
compared with the previous period.
Capital investments in property, plant and equipment totaled ¥21.7
billion (US$261.4 million). By business segment, capital investments
amounted to ¥14.5 billion (US$173.9 million) in the Medical businessand ¥6.7 billion (US$80.9 million) in the Pharmaceutical business.
Intangible assets increased 471.0% to ¥13.6 billion (US$163.2
million) due to the increase in goodwill.
Investment and other assets increased 52.7% to ¥117.4 billion(US$1,412.1 million), due mainly to investment securities and deferredincome taxes.
Current liabilities increased 27.6% from the end of the previous
period to ¥176.4 billion (US$2,121.5 million), mainly due to theincrease in trade notes and account payable short-term bank loans.
Long-term liabilities increased 48.0% from the end of the previous
period to ¥191.1 billion (US$2,297.9 million), owing to the increase inlong-term debt.
Total net assets decreased 6.1% from the end of the previous
fiscal year to ¥109.0 billion (US$1,311.3 million), due to the decrease
in retained earnings, unrealized gain on available-for-sale securities
and foreign currency translation adjustments.

Cash Flow
Net cash provided by operating activities decreased 16.9% comparedwith the previous period to ¥21.8 billion (US$ 262.2 million), mainly
because of a decrease in net income.
Net cash used in investing activities amounted to ¥84.7 billion (US$1,018.1 million), mainly due to the purchase of available-for-sales
securities and property, plants and equipment.
Net cash provided by financing activities amounted to ¥86.3 billion(US$1,037.5 million) as a result of increase in short- and long-termloans.
As a result, net cash and cash equivalents increased ¥21.1 billion(US$254.2 million) compared with the end of previous period to ¥78.9
billion (US$ 949.2 million).

25 Nipro Corporation Annual Report 2011

Staff
Total number of employees at the end of the period under review
increased 2,078 compared with the end of the previous period
to 12,017. Employees in Japan increased 111 to 5,005, and theoverseas employees increased 1,967 to 7,012.

Basic policy on distribution of profit
Our policy is that 50% of non-consolidated net income is to be
distributed to shareholders. Employees’ bonuses are determinedaccording to the business performance of the division to which theemployees belong. Bonuses for directors and statutory auditors are
determined on the basis of corporate business performance.
Retained earnings are invested in sales and production facilities aswell as in R&D, with a view to establishing the firm management basis
and long-term business development, which in turn should ensurestable profits in the future.

Risk Factors
The following are risks that may have an effect on the Nipro Group’s
results of operations and/or its financial condition.
The items concerned were determined as of March 31, 2011.

(1) Risks Related to Product Safety
The Nipro Group brings all of its capabilities to bear in securing
product safety in the design, development and manufacturing of
medical equipment and pharmaceutical products. There are still therisks, however, that accidental defects or side-effects could result indamages to a third party and our being sued for liability.
To cover these risks, we therefore maintain general liability andproduct liability insurance. In the unlikely event of a successful claim inexcess of the insurance coverage, however, there could be a material
adverse effect on our results of operations and financial condition.

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

(3) Risks Related to Changes in Government Healthcare
Policies
The business sector to which the Nipro Group belongs is intimately
connected with the healthcare system and is subject to theregulations laid out by the government organizations, including the
National Health Insurance System and the Pharmaceutical Affairs
Law. Should circumstances arise in which we were unable to respondto changes in the environment brought about by unforeseeable
wholesale changes in the government healthcare policies, there could

be a material adverse effect on our results of operations and financial
condition.

(4) Risks Related to Changes in Sale Prices
The products sold by the Nipro Group include some that are, in
general, subject every two years to the effect of price reductions in thesystem of payment for medical care, drug prices and reimbursement
prices for medical materials and supplies. Moreover, should measures
to hold down medical costs also become pervasive worldwide,
resulting in intensified competition between corporations and leading
to prices falling to a greater degree than anticipated, there could bea material adverse effect on our results of operations and financial
condition.

(5) Risks Related to Changes in Prices of Raw Materials
The products manufactured by the Nipro Group include some that are
made from petrochemical products such as plastics.
Should the cost of raw materials such as petrochemicals rise,
there could be a material adverse effect on our results of operations
and financial condition.

(6) Risks Related to Overseas Expansion
The Nipro Group maintains manufacturing bases and sales offices
around the world for the production and supply of its products.
Should there be unexpected revisions to legal regulations or politicalor economic changes in these countries or regions, there could bea material adverse effect on our results of operations and financial
condition.

(7) Risks Related to Intellectual Property
The Nipro Group owns numerous patents and trademarks, andmaintains various proprietary rights for the products it manufactures.
Additionally, we take all possible measures to avoid infringing on
the patents and proprietary rights of any third party, and to avoid
breaching any license agreements we have concluded concerningtechnologies. Nevertheless, if an unanticipated claim for damages
were to be made by a third party and the defense of the Nipro Group
were to be rejected, there could be a material adverse effect on its
results of operations and financial condition.

(8) Risks Related to Environmental Regulations
The Nipro Group believes it has taken adequate precautions tocomply with applicable regulations in the course of its businessactivities. Should our activities cause an unforeseen environmental
problem, however, with a claim for damages made against us, there
could be a material adverse effect on our results of operations andfinancial condition.

(9) Risks Related to Exchange Rate Fluctuations
The Nipro Group, including its overseas subsidiaries, carries out its
foreign currency transactions primarily in US dollars and euro, but
calculates financial statements for its overseas subsidiaries using
Japanese yen for the purpose of producing consolidated financial
statements. Fluctuations in exchange rates may therefore have amaterial adverse effect on our results of operations and financial
condition.

(10) Risks Related to Investment Value
The Nipro Group’s assets include investments in stocks and othersecurities. These investments have been made for purposes suchas building good business relationships with the issuers of suchsecurities, or for gathering useful information for the development of
new products or for new business opportunities. Should the valueof these investments decline significantly owing to fluctuations inthe stock market, circumstances at an issuer, or a change in theaccounting methods used to deal with these investments, there could
be a material adverse effect on our results of operations and financial
condition.

(11) Risks Related to Controls on Personal Information
The Nipro Group has established strict precautions to protect theconfidentiality of the personal information in the Group’s possession.
However, if due to unforeseen events or an accident this personal
information is leaked outside the Group, causing a loss of trust or
customers, there could be a material adverse effect on our results ofoperations and financial condition.

(12) Risks Related to Litigation
On December 7, 2007, a damage suit was filed at the Tokyo Higher
Court by Naigai Co., Ltd. and Naigai Glass Kogyo Co., Ltd. against
the Company, based on the 25th article of the antitrust law. The
claimed amount was ¥2,032 million (US$24.438 thousand, based ona rate of US$1=¥83.15). The Company is arguing, among others, theoccurrence of the damage and the correlation between the act andthe damage. Should the defense of the Company be unsuccessful
and a judgment to order the payment of compensation be given to
the Company, there could be a material adverse effect on our resultsof operations and financial condition.

(13) Risk Related to Fund Raising
The Nipro Group relies on debt finance in the form of loans fromfinancial institutions or issuance of corporate bonds and commercial
paper etc. to raise our business and investment funds. Due to turmoil
in financial markets, reduction of lending from financial institutions
to us or a significant downgrade of our credit rating by credit rating
agency, we may not be able to raise the necessary funds when weneed them on acceptable term, our fund raising may become more
restricted or the cost of fund raising could increase, and there could
be a material adverse effect on its results of operations and financial
condition.

(14) Other Risks
Fire, earthquake, terrorist act, war, epidemic, or other unforeseen
man-made or natural disasters affecting areas or facilities where the
Nipro Group conducts its business activities may possibly cause adelay or interruption in production, sales, distribution, or provision ofservices. Should such a delay or interruption become extended, there
could be a material adverse affect on our results of operations andfinancial condition.

Nipro Corporation Annual Report 2011 26

10 Year Summary

Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31

Millions of yen
2011
Income Statement Data:
Net sales·····················································································
Medical (1)·············································································
Pharmaceutical (1)·································································
Glass and Materials (1)··························································
Other (1)················································································Store (1)················································································
Cost of sales···············································································
Selling, general and administrative expenses·······························
Operating income········································································
Medical (2)·············································································
Pharmaceutical (2)·································································
Glass and Materials (2)··························································
Other (2)················································································Store (2)················································································
Income before income taxes and minority interests······················Net income··················································································
Capital expenditures ···································································
Depreciation and amortization·····················································
R&D expenses·············································································
Balance Sheet Data:
Total assets·················································································
Property, plant and equipment-net···············································
Working capital············································································
Current liabilities··········································································
Long-term liabilities······································································
Common stock············································································
Capital surplus·············································································Net Assets (3)··············································································

¥

¥

2010

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

476,510
128,506
40,621
176,401
191,071
28,66329,973
106,510

¥

2009

2008

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

383,397
124,20941,725
138,204
129,122
28,66329,973
114,309¥330,641
126,739
46,070114,796
119,285
28,66329,973
95,049¥349,302
118,81253,911
108,835
120,923
28,66329,975
118,156

¥

71.4
—
32.0
1,498.5

¥

70.2
—
37.5
1,861.8

175,945
112,970
52,726
9,554
695—
124,396
36,774
14,775
16,209
4,082
1,772
4

¥

—
9,379
4,531
33,142
18,1095,352

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

Yen
Per share data:
Basic earnings (4)········································································
Diluted earnings (4)······································································Cash dividends············································································
Equity··························································································

¥

38.7
34.9
50.0
1,679.4

¥

114.4
114.1
53.0
1,802.3

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

63,878,505
12,017

63,878,505
9,939

63,878,505
9,354

63,878,505
9,020

Selected Data and Ratios:
Equity ratio (5) (%)········································································
Return on assets (5) (%)·······························································
Return on equity (5) (%)·······························································
Price earnings ratio (5) (times)······················································

22.4
4.0
2.2
42.5

29.8
5.1
6.9
15.8

28.7
4.3
4.2
21.5

33.8
4.0
3.7
24.8

Note:
(1) Effective the fiscal year ended March 31,2011, the Company adopted ASBJ Statement No.17 “Accounting Standard for Disclosures about Segment of anEnterprise and Related Information” (March 27, 2009) and ASBJ Guidance No.20 “ Guidance on Accounting Standard for Disclosures about Segment of anEnterprise and Related Information.” Net sales and operating income for the period for the fiscal year ended March 31, 2010 have been restated to show what
the Group’s result would have been if the new accounting standards had been applied in that year. Before the fiscal year ended March 31, 2009, net sales andoperating income have been stated in compliance with previous accounting rules.
(2) Operating income at the operating segment level is not adjusted for intra-segment transactions. See note 13 to the consolidated financial statements.
(3) Effective April 1, 2006, the Company adopted a new accounting standard for presentation of net assets in the balance sheet issued by the Accounting Standard
Board of Japan. In the new accounting standard, net assets refer to the sum of total shareholders’ equity, accumulated other comprehensive income, and minority
interests. Minority interests, however, have not been included in net assets above to conform to the prior years’ presentation.
27 Nipro Corporation Annual Report 2011

Thousands of
U.S. dollars(Note1)Millions of yen
2007

¥

2006

184,363
97,30042,152
12,9191,019
30,973
132,142
39,16813,053
14,334
3,298
1,865
151

¥

270
16,776
8,555
23,093
12,4704,461¥

336,660
104,882
43,128104,105
105,535
28,66329,973
125,651

2005

206,801
90,86835,22011,934
1,518
67,261
149,971
44,49812,332
13,430
2,111
1,836
529

¥

578
9,061
4,513
20,874
12,315
3,760¥

338,741
106,195
34,579111,285
113,453
28,66329,972
112,3912004

192,320
82,504
26,207
11,667
1,101
70,841140,072
41,844
10,404
11,039
2,261
1,889
288

¥

115
8,660
4,519
16,312
10,266
3,422¥

293,749
98,78839,12396,242
99,19828,66329,972
96,7002003

188,700
78,72725,33911,891
1,386
71,357137,153
38,99012,557
12,117
2,471
1,819
404

¥

420
8,044
4,216
14,500
9,819
3,074

2011

2002

180,370
76,00921,97911,064
1,758
69,560128,776
36,695
14,89914,175
1,981
1,777
148

¥

1,109
8,781
5,078
20,7758,767
2,328

171,217
77,572
15,946
11,234
1,701
64,764122,092
34,69014,43515,016
1,104
1,806
115

$

2,356,500
1,597,318
457,066
297,102
5,014—
1,656,861
492,483
207,156
221,732
19,94032,483
1,058—
89,381
29,537
280,494
255,490
59,856

1,037
11,617
5,842
17,166
7,215
2,553

¥

279,701
94,00528,57096,36486,932
28,66329,972
94,711¥

252,848
91,14727,542
88,88978,65728,66329,972
83,533¥

245,403
81,029
9,792
105,764
61,952
23,11324,43576,099$5,730,728
1,545,472
488,526
2,121,480
2,297,908
344,714360,469
1,280,937
U.S. dollars(Note1)

¥

64.9
—
30.5
1,487.5

¥

84.3
78.5
32.0
1,310.7

¥

104.4
92.4
47.0
1,343.7

$

0.47
0.42
0.60
20.20

Yen

¥

134.7
—
80.0
1,979.2

¥

69.6
—
37.5
1,767.7

¥

69.4
—
38.5
1,519.6

63,878,505
8,807

63,878,505
9,048

63,878,505
8,617

63,878,505
8,132

63,878,505
8,029

56,670,149
7,835

37.3
3.9
7.2
17.1

33.2
3.9
4.3
26.0

32.9
3.6
4.7
25.6

33.9
4.7
4.7
24.1

33.0
6.0
6.4
21.5

31.0
6.1
8.0
17.4

(4) Effective April 1, 2002, the Company adopted a new accounting standard for earnings per share of common stock issued by the Accounting Standards Board ofJapan. Basic earnings and diluted earnings per share for the year ended March 31, 2003 and thereafter are computed in accordance with the new standard. Basicearnings and diluted per share for the prior years are not translated to reflect the new standard’s provision, based on the weighted average number of outstanding
shares for the period.
(5) Equity ratio is the ratio of the sum of total shareholders’ equity and accumulated other comprehensive income to total assets at the period end. Return on assets
is the ratio of operating income for the period to average of total assets during the period. Return on equity is the ratio of net income for the period to average ofthe sum of total shareholders’ equity and accumulated other comprehensive income during the period. Price earnings ratio is the ratio of the closing price of theCompany’s shares listed on the First Section of the Tokyo Stock Exchange on the last trading day in March of each year to basic earnings per share.
Nipro Corporation Annual Report 2011 28

Consolidated Balance Sheets

Nipro Corporation and its Consolidated Subsidiaries
As of March 31, 2011 and 2010

Millions of yen
2011

2010

Thousands of U.S. dollars(Note 1)
2011

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

78,922¥56,188$949,152

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

2,194

3,079

26,387

Trade notes and accounts receivable·················································

61,23756,304736,464

Allowance for doubtful receivables·····················································

(414)

(433)

(4,979)Inventories (Note 3) · ·········································································

60,94354,704732,928

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

4,204

3,149

50,559Other current assets ·········································································

9,936

6,938

119,495

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

217,022

179,929

2,610,006

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

20,115

19,766

241,912

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

111,353

107,011

1,339,182

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

164,119

143,960

1,973,770

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

8,990

11,993

108,118

304,577

282,730

3,662,982

Accumulated depreciation·································································(176,071)(158,521)(2,117,510)

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

128,506

124,209

1,545,472

Intangible assets:
Goodwill····························································································

7,834

562

94,215

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

5,734

1,814

68,959Total intangible assets··································································

13,5682,376

163,174

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

16,68522,787200,661

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

88,87950,0881,068,900

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

1,706

1,871

20,517

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

2,490

335

29,946

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

7,654

1,802

92,052

Total investments and other assets···············································

117,41476,883

1,412,076

383,397$ 5,730,728

Total·································································································
The accompanying notes are an integral part of these statements.

29 Nipro Corporation Annual Report 2011¥

476,510¥

Thousands of U.S. dollars(Note 1)
2011

Millions of yen
2011

2010

Liabilities and net assets
Current liabilities:
Short-term bank loans (Notes 5 and 9)··············································¥

67,373¥44,201$

810,259

Current portion of long-term debt (Notes 5 and 9)·····························

34,28630,402

412,339

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

33,582

29,204

403,872

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

3,166

4,933

38,076

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

11,174

9,921

134,384

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

1,955

1,955

23,512

Commercial papers (Note 9)······························································

10,00010,000120,265

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

7,976

5,803

95,923

Provision for loss on disaster·····························································

4,040

—

48,587

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

2,849

1,785

34,263

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

176,401

138,204

2,121,480

Long-term liabilities:
Long-term debt (Notes 5 and 9)························································

178,550

115,840

2,147,324

Accrued pension and severance liabilities (Note 10)···························

1,616

1,973

19,435

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

7,465

7,771

89,778Other long-term liabilities···································································

3,440

3,538

41,371

Total long-term liabilities································································

191,071

129,122

2,297,908

28,663

28,663344,714

Capital surplus···················································································

29,97329,973

360,469

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

46,63147,220560,806

Less cost of common shares of treasury stock··································

(864)

(862)

(10,391)

Commitments and contingent liabilities (Note 11)
Net Assets (Note 12):
Common stock ················································································
Authorized: 200,000,000 shares
Issued: 63,878,505 shares(456,420 shares in 2011 and 455,328 shares in 2010)
Total shareholders’ equity··························································

104,403

104,994

1,255,598

Unrealized gain on available-for-sale securities···································

11,38815,024

136,957

Foreign currency translation adjustments···········································(9,281)(5,709)(111,618)

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

2,107

9,315

25,339Minority interests···············································································

2,528

1,762

30,403

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

109,038

116,071

1,311,340

Total·································································································¥

476,510¥383,397$

5,730,728

The accompanying notes are an integral part of these statements.

Nipro Corporation Annual Report 2011 30

Consolidated Statements of Income

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2011 and 2010

Millions of yen
Net sales·································································································
Cost of sales··························································································
Gross profit························································································¥

2011
195,943
137,768
58,175¥

2010
177,830
126,145
51,685

Thousands of U.S. dollars(Note 1)2011$
2,356,500
1,656,861
699,639

Selling, general and administrative expenses (Notes 14 and 15)
Operating income··············································································

40,95017,22533,591
18,094492,483
207,156

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

1,243(2,431)(155)(2,443)
(201)
836
(65)
(208)
(231)
—
(5,260)
(878)
7,432

857
(2,251)(316)(456)(1,329)
—
(23)
(541)
—
(185)
—
22
13,872

14,949(29,236)(1,864)(29,381)(2,417)
10,054(782)(2,502)(2,778)—(63,259)(10,559)
89,381

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

6,371(1,751)

6,843
(475)

76,621(21,058)

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

2,812

7,504

33,818

Minority interests in income (loss) of consolidated subsidiaries
Net income························································································

¥

356
2,456

¥

251
7,253

$

U.S. dollars(Note 1)

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

38.7
34.9
50.0

4,281
29,537

0.47
0.42
0.60

114.4
114.1
53.0

The accompanying notes are an integral part of these statements.

Consolidated Statements of Comprehensive Income

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2011 and 2010

Millions of yen
Net income before minority interests··················································
Other comprehensive income (loss):		 Unrealized gain on available-for-sale securities·······························
		 Foreign currency translation adjustment·········································
Comprehensive income········································································
Comprehensive income attribute to:		 Shareholders of the parent·····························································
		 Minority interests············································································
The accompanying notes are an integral part of these statements.
31 Nipro Corporation Annual Report 2011

¥

2011
2,812

¥

(3,637)(3,618)(4,443)(4,754)
311

¥

2010
7,504

¥

10,026
3,456
20,986
20,763
223

Thousands of U.S. dollars(Note 1)
2011$
33,818$(43,740)(43,512)(53,434)(57,174)3,740

Consolidated Statements of Changes in Net Assets

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2011 and 2010

Millions of yen

Thousands

Balance at March 31, 2009····Outstanding
number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

63,431¥28,663¥29,973¥41,458

Treasury
stock¥(850)

Total
shareholders’equityUnrealized
gain onavailable-for-salesecurities¥99,244¥4,998Foreign
Accumulated
currency
other comtranslation prehensive
incomeadjustments¥(9,193)¥(4,195)

Minority
interests

Total
net assets¥1,511¥96,560

Net income · ····················

7,253

7,253

7,253

Cash dividends·················(1,491)(1,491)(1,491)

(13)

(13)

Purchase of treasury stock····(8)

Disposal of treasury stock····Other net change
during the year···············

0

Balance at March 31, 2010····63,423(13)(0)

28,66329,973

1

47,220

(862)

1

1

—

10,0263,484

13,510251

13,761

104,994

15,024(5,709)

9,315

1,762

116,071

Net income·······················

2,456

2,456

2,456

Cash dividends·················(3,045)(3,045)(3,045)

(2)

(2)

(2)

(0)

(0)

Purchase of treasury stock····(1)

Disposal of treasury stock····Other net change
during the year···············
Balance at March 31, 2011····063,422(0)¥28,663¥29,973¥46,631(3,636)(3,572)(7,208)¥(864) ¥104,403¥11,388¥(9,281)¥2,107766(6,442)¥2,528 ¥109,038

Thousands of U.S. dollars (Note 1)

Thousands

Balance at March 31, 2010····(0)—

Outstanding
number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

63,423$344,714$360,469$567,889$(10,367) $1,262,705 $180,686

Total
shareholders’equityUnrealized
gain onavailable-for-salesecurities

Foreign
Accumulated
currency
other comtranslation prehensive
incomeadjustments

Minority
interests$(68,659)$21,191 $1,395,923$112,027

Total
net assets

Net income·······················

29,53729,53729,537

Cash dividends·················(36,620)(36,620)(36,620)

(24)

(24)

(24)

(0)

(0)

(0)

Purchase of treasury stock····(1)

Disposal of treasury stock····Other net change
during the year···············
Balance at March 31, 2011····

0

(0)

—
63,422$344,714$360,469$560,806(43,729)(42,959)(86,688)$(10,391) $1,255,598 $136,957 $(111,618)$25,339

9,212(77,476)$30,403 $1,311,340

The accompanying notes are an integral part of these statements.

Nipro Corporation Annual Report 2011 32

Consolidated Statements of Cash Flows

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2011 and 2010

Millions of yen
2011
Operating activities:
Net income························································································
Adjustments to reconcile net income to net cash provided operating activities:
Depreciation and amortization·······················································
Amortization of goodwill·································································
Loss on impairment of fixed assets················································
Equity in loss (profit) of an affiliated company·································
Allowance for doubtful receivables·················································
Gain on sales of available for sales securities·································
Provision for deferred taxes···························································
Exchange loss (gain)······································································
Loss on devaluation of marketable securities·································
Loss on sale and disposal of property, plant and equipment-net··············
Other, net······················································································¥

Changes in operating assets and liabilities:
Trade receivables···········································································
Inventories·····················································································
Other current assets······································································
Lease deposits··············································································
Trade payables··············································································
Accrued income taxes···································································
Other, net······················································································
		 Total adjustments·······································································
		 Net cash provided by operating activities···································
Investing activities:
Purchase of property, plant and equipment········································
Proceeds from sale of property, plant and equipment························
Purchase of available-for-sale securities·············································
Purchase of investments in unconsolidated subsidiaries····················
Proceeds from sales of available-for-sale securities····························
Purchases of investments in consolidated
subsidiaries affecting scope of consolidation··································Net decrease (increase) in short-term loans to affiliates······················
Deposits (Over three months)····························································
Other, net··························································································Net cash used in investing activities···············································
Financing activities:
Net increase (decrease) in short-term loans·······································
Proceeds from long-term loans··························································
Repayment of long-term loans···························································
Proceeds from issuance of bonds·····················································
Repayment of bonds·········································································Net increase (decrease) in commercial paper·····································Cash dividends paid··········································································
Other, net··························································································Net cash provided by (used in) financing activities······················
Effect of exchange rate changes on cash and cash equivalents···············Net increase (decrease) in cash and cash equivalents·····················Cash and cash equivalents, beginning of period······························Cash and cash equivalents of newly
consolidated subsidiary, beginning of period······························Cash and cash equivalents, end of period·········································
The accompanying notes are an integral part of these statements.

33 Nipro Corporation Annual Report 2011

¥

2,456

2010
¥

7,253

Thousands of U.S. dollars(Note 1)
2011$

29,537

21,244
1,744
65
201
(212)
(836)
(1,751)
2,557
231
155
1,198

18,421
295
23
1,329
(25)
—
(475)
39
—
316
751

255,490
20,974782
2,417(2,550)(10,054)(21,058)
30,752
2,778
1,864
14,408(4,927)(5,472)
(450)
165
6,542
(1,767)667
19,34421,800(7,035)(2,856)
(676)
(159)
4,987
2,651
1,402
18,98826,241(59,254)(65,808)(5,411)
1,984
78,677(21,251)
8,020
232,640
262,177(19,256)
51(49,113)(19,097)
4,805(25,596)59(29)(20,618)—(231,581)
613(590,655)(229,669)
57,787

(624)
(588)
800
(1,636)(84,658)

—
196
800
193
(44,995)(7,505)(7,072)
9,622(19,676)(1,018,136)

23,06280,108(23,234)
19,890(10,160)—(3,041)(359)
86,266

13,712
29,111(18,757)
17,971(20,140)
10,000(1,491)(271)
30,135277,354
963,415(279,423)
239,206(122,189)—(36,572)(4,317)
1,037,474(2,269)21,13956,188(545)
10,83645,352(27,288)
254,227
675,743

1,595
78,922¥—56,188$19,182
949,152

Notes to Consolidated Financial Statements

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

In preparing the accompanying consolidated financial statements,
certain reclassifications have been made to the consolidated
financial statements issued domestically, in order to present themin a form which is more familiar to readers outside Japan. However,no adjustment has been made which would change the financial
position or the results of operations presented in the original financial
statements. In addition, the notes to consolidated financial statements
include additional information which is not required under generally
accepted accounting principles and practices in Japan.
The financial statements presented herein are expressed inJapanese yen and, solely for the convenience of the reader, have beentranslated into United States dollars at the rate of ¥83.15=US$1, theapproximate exchange rate on March 31, 2011. These translations
should not be construed as representations that the Japanese yenamounts actually are, have been, could be converted into U.S. dollar
amounts.

2. Summary of Significant Accounting Policies(a) Basis of Consolidation(c) Cash and Cash Equivalents

The consolidated financial statements include the accounts of theCompany and the significant subsidiaries and affiliated company
accounted for by the equity method.
Investments in unconsolidated subsidiaries are stated at cost andthe equity method is not applied for the valuation of such investments
since they are considered immaterial in the aggregate.
All significant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized profit included
in assets resulting from transactions within the Company and its
consolidated subsidiaries is eliminated. The difference between thecost of investments in subsidiaries and affiliates and the equity in their
net assets at dates of acquisition is being amortized on a straight-line
basis over five years.
All accounts herein have been presented on the basis of the twelve
months ended March 31, 2011 for the Company and for consolidated
domestic subsidiaries, and December 31, 2010 for all consolidated
overseas subsidiaries.
Adjustments have been made for any significant intercompany
transactions which took place during the period between the end of
accounting period of the consolidated overseas subsidiaries and thatof the Company.

Cash and cash equivalents include all highly liquid investments,
generally with original maturities of three months or less, that arereadily convertible to cash.

(d) Inventories
Inventories are stated principally at cost, carrying amount in thebalance sheet is calculated with consideration of written downs dueto the decreased profitability. Cost is determined principally by theaverage method, except for certain inventories determined by the
first-in, first-out method.

(e) Depreciation
Depreciation of property, plant and equipment of the Company andits consolidated domestic subsidiaries is computed principally by
the declining-balance method. The straight-line method is applied tobuildings acquired by the domestic companies after April 1, 1998,
and is principally applied to the property, plant and equipment ofconsolidated overseas subsidiaries.
The range of useful lives is principally from 31 to 50 years forbuildings and from 7 to 8 years for machinery and equipment.

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

Nipro Corporation Annual Report 2011 34

(f) 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 tomaturity with the positive intent and ability to hold to maturity arereported at amortized cost; andii) available-for-sale securities, which are not classified as theaforementioned securities, are reported at fair value. Unrealized
gain and loss, net of applicable tax, reported in the “Accumulated
other comprehensive income” section of net assets.
For year ended March 31, 2011, there was no held-to-maturity
debt securities held by the Company and its consolidated subsidiaries.
Non-marketable available-for-sale securities are stated at cost
determined by the average method.
For other than temporary declines in fair value, investment
securities are reduced to net realizable value by a charge to income.

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

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

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

35 Nipro Corporation Annual Report 2011(j) Application of Accounting Standard
for Asset Retirement Obligations
Effective the fiscal year ended March 31, 2011, the Company has
applied Accounting Standard for Asset Retirement Obligations(ASBJ Statement No. 18, issued on March 31, 2008) and Guidanceon Accounting Standard for Asset Retirement Obligations (ASBJ
Guidance No. 21, issued on March 31, 2008). The impact of thischange was to reduce operating income by ¥12 million (US$144
thousand) and income before income taxes and minority interestsby ¥98 million (US$1,179 thousand).

(k) Revision of Retirement Benefit Scheme
The Company and the consolidated subsidiary company, Nipro
Medical Industries Co., Ltd. had adopted the retirement benefit
scheme framed by unfunded defined benefit pension plan andtax-qualified retirement pension plan. However, from January 1st,
2011, the retirement benefit scheme was transferred to the scheme
framed by unfunded defined benefit plan, funded defined benefit
pension plan and defined contribution pension plan while thetax-qualified retirement pension plan was finished. In accordancewith this transfer, we resulted ¥452 million (US$5,436 thousand) of“gain on revision of retirement benefit plan” as other income, applying“Accounting standard for transfer between retirement benefit plans”(ASBJ Guidance No.1).

(l) Comprehensive income
Effective April 1, 2010, the Company has applied the AccountingStandard for Presentation of Comprehensive Income (ASBJ Statement
No.25, June 30, 2010). The amount of “Valuation and translation
adjustments and others” and “Total valuation and translation
adjustments and others” of previous fiscal year are shown as those of“Accumulated other comprehensive income”

3. Inventories
Inventories consisted of the following:

Millions of yen
2011
Finished goods and merchandises·························································¥

Thousands of U.S. dollars (Note 1)
2011

2010

42,697¥$38,503

513,494

Raw materials·························································································

8,975

7,547

107,937

Work in process·····················································································

6,784

6,192

81,587

Packing and other··················································································

2,487

2,462

Total·····························································································¥

60,943¥29,910$54,704732,928

4. Income Taxes
The Company and its domestic subsidiaries are subject to Japanese national and local taxes based on income which, in aggregate,
resulted in a normal statutory tax rate of approximately 40.5% for the years ended March 31, 2011 and 2010.
The significant components of deferred tax assets and liabilities were as follows:
Millions of yen
2011

Thousands of U.S. dollars (Note 1)
2011

2010

Deferred tax assets
Operating loss carryforwards for tax purposes····························

¥

4,516

¥

$

4,330

54,311

Intercompany profits···································································

682

821

8,202

Valuation loss on inventories························································

789

165

9,489

Allowance for bonuses to employees··········································

828

706

9,958

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

792

792

9,525

Accounts receivable····································································

267

190

3,211

Loss on impairment of fixed assets·············································

957

808

11,509

Excess of allowance for doubtful accounts over tax allowable amounts·······

1,130

1,159

13,590Accrued pension and severance liabilities····································

600

782

7,216

Accrued enterprise taxes·····························································

258

378

3,103

Provision for loss on disaster·······················································

1,608

—

19,339Other··························································································

2,047

905

24,617Gross deferred tax assets··································································¥

Total deferred tax assets····································································

14,474¥(4,727)

Less: Valuation allowance··································································$

11,036

174,070(56,849)(4,941)

¥

9,747

¥

6,095

$

117,221

¥

7,787

¥

10,267$93,650

Deferred tax liabilities
Unrealized gain on available-for-sale securities····························
Revaluation reserve for land························································

795

—

9,561

Revaluation reserve for intangible assets·····································

1,323

—

15,911Other··························································································

613

115

7,372

Total deferred tax liabilities···························································¥

10,518¥

10,382$

126,494

Net deferred tax assets (liabilities)···························································

¥

(771)

¥

(4,287)$(9,273)

Reconciliation of the differences between the statutory tax rates and the effective income tax rates was as follows:
2011

2010

Statutory tax rate······························································································································

40.5%

40.5%

Expenses not deductible for tax purposes···················································································

3.5

2.5

Non-taxable dividend income······································································································

(2.5)

(1.3)

Loss in subsidiaries·····················································································································

31.6

7.4

Tax credits primarily for research and development costs····························································

(4.9)

(2.4)

Operating loss carryforwards for tax purpose··············································································

(3.5)

(2.0)

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

(2.5)

1.2

Effective income tax rate · ················································································································

62.2

45.9
Nipro Corporation Annual Report 2011 36

5. Pledged Assets
The following assets were pledged as collateral:
Millions of yen
2011
Land··································································································

¥

1,523

¥

8,989

Total························································································

2010

¥

1,523

¥

9,195

7,466

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

Thousands of U.S. dollars (Note 1)
2010$

18,316$108,106

89,790

7,672

The above assets were pledged against the following liabilities:
Millions of yen
2011
Short term bank loans·······································································

¥

¥

¥

2011

7,691

910

$

72,616

5,666
¥

7,713

12,026
7,853

1,137

6,038

Long-term debt·················································································
Total························································································

1,000
653

Current portion of long-term debt······················································

Thousands of U.S. dollars (Note 1)
2010$

92,495

6. Investment securities
Investment securities as of March 31, 2011 and 2010 consisted of the followings:
Millions of yen
2011

Thousands of U.S. dollars (Note 1)
2011

2010

Non-current:
Marketable:
Marketable equity securities ······················································¥Sub total·····················································································¥

Non-marketable securities·····························································
Total···························································································

37 Nipro Corporation Annual Report 2011

87,459¥38

Investment trust funds and other················································$

1,051,822

48,755$

1,052,279

48,713457

4287,497

¥

¥

1,382

¥

1,333

$

16,621¥

88,879¥50,088$1,068,900

The carrying amounts and aggregate fair values of marketable securities for investments as of March 31, 2011 and 2010 were as follows:
Millions of yen
2011
Unrealized gain
Unrealized loss

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

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

69,14947
69,196¥

Cost

Thousands of U.S. dollars(Note 1)
2011
Unrealized gain
Unrealized loss¥

$ 831,618
565$ 832,183¥¥

18,881—
18,881$ 227,071—$ 227,071

¥
¥

$
$

571
9
580

6,867
108
6,975

¥
¥

24,29047
24,337¥¥25,195—25,195

¥
¥

772
5
777

87,45938
87,497

Fair Value$ 1,051,822
457$ 1,052,279

Millions of yen
2010
Unrealized gain
Unrealized loss

Cost
Available-for-sale securities
Equity securities·····································································
Debt securities and other························································
Total···················································································¥

Fair Value

Fair Value¥¥

48,71342
48,755

Proceeds from sales of securities and gross realized gain on those sales for the years ended March 31, 2011 and 2010 were as follows:

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

Millions of yen
2011
2010
—
¥
4,805
¥
—
836
0
—

Thousands of U.S. dollars (Note 1)
2011$
57,787
10,0540

Evaluation of investment securities
For the year ended March 31, 2011, the Company recognized devaluation of ¥231 million (US$ 2,778 thousand) on available-for-sale securities.
The Company recognizes devaluation losses on investment securities whose values have declined by at least 50% of their book value unless on areasonable and consistence basis. In cases in which the values have declined 30% to 50%, we recognize evaluation losses except when the value
is deemed to be recoverable.

7. Leases
Finance leases entered into prior to April 1, 2008 that do not transfer ownership of leased property to the lessee are accounted for as if they wereoperating leases. The details of such finance leases accounted for as operating leases at March 31, 2011 and 2010 were as follows:

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

Millions of yen
2011
2010
¥
942
¥
1,431
815
1,098
¥
127
¥
333

Thousands of U.S. dollars (Note 1)
2011$
11,329
9,802
$
1,527

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

Millions of yen
2011
2010
¥
146
¥
258
68
237
¥
214
¥
495

Thousands of U.S. dollars (Note 1)
2011
$
1,756
818
$
2,574

Lease payments under such leases for the years ended March 31, 2011 and 2010 were ¥219 million (US$2,634 thousand) and ¥307 million,
respectively.
Nipro Corporation Annual Report 2011 38

8. Financial instruments(1) Circumstances on financial instruments(a) Policy for financial instruments
The Company manages the temporary surplus funds by deposit with banks that have a high level of safety.
The Company raises funds for business operation with mainly bank loans and bonds considering their business investment and cash planning.
(b) Details and risk of financial instruments and its risk management
Receivable such as trade notes and accounts receivable are exposed to customer’s credit risk. Receivables denominated in foreign currencies are
exposed to the market risk of fluctuation in foreign currency exchange rates.
In order to reduce the customer’s risk, the company monitors the dues and balances by customer in accordance with the company’s regulationsof credit administration.
Investments securities are exposed to the market fluctuation risk, but mainly consist of equity of the companies which conduct business with thecompany. 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-terms loans payable are mainly borrowed to raise operating capital and long-term loans payable are mainly borrowed to make capital
expenditures. Bonds and commercial papers are mainly issued to raise the funds for bonds retirement.
Lease obligations are mainly for the capital expenditures, free from interest-rate risk because the interest rate is fixed.
Payables, loans and bonds are exposed the liquidity risk, but the Company and its subsidiaries manage the risk by establishing cash planning.
(c) Supplemental information on market values of financial instruments
Market values of financial instruments include values based on market price and reasonably estimated values when market price is not available.
Because a change factor is counted in the estimation, the estimated price may be changed by adopting different assumptions.

(2) Fair values of financial instruments
The book values, fair values and the differences between them as of March 31, 2010 and 2011 are as follows (Financial instruments for which themarket value is extremely difficult to determine are not included as described in remark 2.):

Cash and cash equivalents, time deposits····Trade notes and accounts receivable,
net of allowance for doubtful receivables······
Investments securities··································
Assets total··················································
Trade notes and accounts payable···············
Short-term bank loans, current portion of
long-term debt, and commercial paper·········
Other notes and account payable (1)············
Long-term debt············································
Lease obligations (2)·····································
Liabilities total···············································Cash and cash equivalents, time deposits····Trade notes and accounts receivable,
net of allowance for doubtful receivables······
Investments securities··································
Assets total··················································
Trade notes and accounts payable···············
Short-term bank loans, current portion of
long-term debt, and commercial paper·········
Other notes and account payable (1)············
Long-term debt············································
Lease obligations (2)·····································
Liabilities total···············································
39 Nipro Corporation Annual Report 2011

Book value¥
81,116

Millions of yen
2011
Fair value¥
81,116

Difference
¥
—

¥
¥

60,82387,497229,436
33,582¥¥60,82387,497229,436
33,582

¥
¥

—
—
—
—

¥

111,659
13,748
178,550
1,461
339,000¥

111,659
13,748178,387
1,405
338,781

¥

—
—
163
56
219

Book value¥
59,267

Millions of yen
2010
Fair value¥
59,267

Difference
¥
—

¥
¥

55,871
48,755
163,893
29,204¥¥55,871
48,755
163,893
29,204

¥
¥

—
—
—
—

¥

84,603
9,662
115,840
1,416
240,725¥

84,603
9,662
115,2161,343
240,028

¥

—
—
624
73
697

Thousands of U.S. dollars (Note 1)
2011
Book value
Fair value
Difference$ 975,539$ 975,539$—
731,485
1,052,279$ 2,759,303$ 403,872

731,485
1,052,279$ 2,759,303$ 403,872

1,342,863
165,340
2,147,324
17,571$ 4,076,970

1,342,863
165,340
2,145,364
16,897$ 4,074,336

$
$

—
—
—
—

$

—
—
1,960
674
2,634

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

Remark 1 Methods used to calculate fair values of financial instruments and the details of securities<Assets>• Cash and cash equivalents and trade notes and accounts receivable
Cash and cash equivalents and trade notes and accounts receivable are stated at the relevant book value because the settlement periods areshort 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 and accounts payable  and short-term bank loans and current portion of long-term debt and commercial paper
Because the settlement periods of the above items are short and their fair values are almost the same as their book values, the relevant bookvalues are used.
• Other notes and account payable
Because the settlement periods of the above items are short and their fair values are almost the same as their book values, the relevant bookvalues 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 theassumed interest rate if a similar new loan was entered into.
• Lease obligation
The fair value of lease obligations is calculated by applying a discount rate to the total of principal and interest. The discount rate is based on theassumed interest rate if a current lease transaction was renewed.
Remark 2 Financial instruments for which the fair value is extremely difficult to determine¥

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

Millions of yen
2011
18,068¥

2010
24,120Thousands of U.S. dollars (Note 1)
2011$
217,294

Because these items have no market value and are difficult to estimate the future cash flow and it is extremely difficult to determine their fair values,
they are not included in investment securities and investment in unconsolidated subsidiaries and an affiliate accounted for by the equity method above.
Remark 3 Planned redemption amounts after the balance sheet date for monetary receivables with maturity dates are as follows:
Millions of yen
2011
2010
Within 1 year
Within 1 year¥
81,116¥59,26760,82355,871

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

Thousands of U.S. dollars (Note 1)
2011
Within 1 year$
975,539
731,485

Remark 4 Planned repayment amounts after the balance sheet date for monetary payables with maturity dates are as follows:
Planned repayment amounts after the balance sheet date for monetary payables with maturity dates at March 31, 2011 are as follows:

Within 1 year
Trade notes and accounts payable··················
Short-term bank loans, current portion of
long-term debt, and commercial paper······
Other notes and account payable····················Long term debt················································
Lease obligations·············································
Total································································¥

33,582¥

111,659
13,748—375
159,364

Within 1 year
Trade notes and accounts payables················
Short-term bank loans, current portion of
long-term debt, and commercial paper······
Other notes and account payable····················Long term debt················································
Lease obligations·············································
Total································································$

403,872

1,342,863
165,340—
4,510$ 1,916,585

Millions of yen
2011
Over 1 year but Over 2 years but Over 3 years but Over 4 years but
within 2 years
within 3 years
within 4 years
within 5 years
—
¥
—
¥
—
¥
—
¥

¥

—
—
42,847358
43,205¥——24,162334
24,496¥——42,510353
42,863¥——37,091
41
37,132Thousands of U.S. dollars (Note 1)
2011
Over 1 year but Over 2 years but Over 3 years but Over 4 years but
within 2 years
within 3 years
within 4 years
within 5 years
—
$
—
$
—
$
—
$

$

—
—
515,299
4,305
519,604$——
290,582
4,018
294,600$——
511,245
4,245
515,490$——446,073493
446,566Over 5 years
¥

—

¥

—
—
31,940031,940Over 5 years
$

—

$

—
—
384,1250384,125

Nipro Corporation Annual Report 2011 40

9. Short-Term Loans and Long-Term Debt
Short-term loans comprised overdrafts and promissory notes.
The weighted-average interest rate of short-term bank loans for the years ended March 31, 2011 and 2010 was 0.682% and 0.846%, respectively.
The weighted-average interest rate of commercial paper for the year ended March 31, 2011 and 2010 were 0.118% and 0.107% respectively.
Long-term debt comprised the following:Thousands of U.S. dollars(Note 1)
2011

Millions of yen
2011
1.51% unsecured bonds due 2012··························································

¥

2010

5,000

¥

5,000

$

60,132

1.37% unsecured bonds due 2014··························································

3,000

3,000

1.42% unsecured bonds due 2011··························································—

10,00036,079
—1.37% unsecured bonds due 2013··························································

10,00010,000120,265

2.04% unsecured bonds due 2018··························································

10,00010,000120,2650.877% unsecured bonds due 2016························································

20,000—240,529

Zero coupon convertible bonds due 2015················································

15,00015,000180,397

0.95% unsecured bonds due 2010··························································

—

100

—

0.79% unsecured bonds due 2010··························································

—

10

—

1.55% unsecured bonds due 2011··························································
Long-term bank loans due through 2020, with weighted-averageinterest rate of 1.217% for the year ended March 31, 2011, and of
1.434% for the year ended March 31, 2010.············································
Less current portion of long-term debt······················································

—

50

—

149,836(34,286)

93,082(30,402)

1,801,996(412,339)

Total··································································································In February 2009, the Company issued ¥5,000 million (US$60,132
thousand) of 1.51% privately-placed bonds due 2012.
In September 2009, the Company issued ¥3,000 million(US$36,079 thousand) of 1.37% privately-placed bonds due 2014.
In March 2006, the Company issued ¥10,000 million (US$120,265
thousand) of 1.42% unsecured bonds due 2011.
In March 2008, the Company issued ¥10,000 million (US$120,265
thousand) of 1.37% unsecured bonds due 2013.
In March 2008, the Company issued ¥10,000 million (US$120,265
thousand) of 2.04% unsecured bonds due 2018.
In March 2011, the Company issued ¥20,000 million (US$240,529
thousand) of 0.877% unsecured bonds due 2016.

¥

178,550¥

115,840$

2,147,324

In March 2010, the Company issued ¥15,000 million (US$180,397
thousand) of zero coupon convertible bonds due 2015.
In August 2005, Zensei Pharmaceutical Industries Co., Ltd. issued¥100 million (US$1,203 thousand) of 0.95% privately-placed bondsdue 2010.
In August 2005, Zensei Pharmaceutical Industries Co., Ltd. issued¥100 million (US$1,203 thousand) of 0.79% privately-placed bonds tobe serially redeemed by 2010.
In March 2006, Zensei Pharmaceutical Industries Co., Ltd. issued¥50 million (US$601 thousand) of 1.55% privately-placed bonds due
2011.

The aggregate annual maturities of long-term debt outstanding at March 31, 2011 are as follows:

2011········································································································

Millions of yen

Thousands of U.S. dollars (Note 1)

2011

2011

¥

34,286$412,3392012········································································································

42,8472013········································································································

24,162

290,583

2014 and thereafter··················································································

111,541

1,341,443

Total··································································································
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 begiven under certain circumstances at the request of the bank.

41 Nipro Corporation Annual Report 2011¥

212,836515,298$

2,559,663

In addition, the agreements provide that the bank has the right tooffset cash deposits against any long-term and short-term bank loanthat becomes due, and in case of default and certain other specified
events, against all other loans payable to the bank.

10. Accrued Pension and Severance Liabilities
The Company and certain consolidated subsidiaries have defined benefit pension plans and unfunded retirement benefit plans, and defined
contribution pension plan for employees. The following table sets forth the changes in projected benefit obligation, plan assets and funded statusof the Company and its consolidated subsidiaries at March 31, 2011 and 2010.
Thousands of U.S. dollars (Note 1)

Millions of yen
20111) Projected benefit obligation·······························································

¥

2011

2010

(8,799)¥$(10,084)(105,821)

2) Fair value of plan assets····································································

6,182

7,122

74,3483) Projected benefit obligation in excess of plan assets 1)+2)················(2,617)(2,962)(31,473)

4) Unrecognized actuarial (gain) loss·····················································

1,039

1,039

12,4955) Unrecognized past service obligation················································

(12)

(15)

(144)

6) Total 3)+4)+5)···················································································(1,590)(1,938)(19,122)267) Prepaid pension cost ·······································································
8) Accrued pension and severance liabilities 6)-7)·································¥(1,616)

313

35
¥

$

(1,973)(19,435)

The breakdown of net pension and severance costs for the years ended March 31, 2011 and 2010 were as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen
2011
Service cost···························································································

¥

2011

2010

698

¥

640

$

8,394

Interest cost··························································································

178

223

2,141

Expected return on plan assets·····························································

(117)

(103)

(1,407)

Amortization of actuarial gain·································································

97

83

1,167

Amortization of past service obligation···················································

(3)

(3)

(36)

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

114

30

1,371

Net pension and severance costs··························································

¥

967

¥

870

$

11,630

The assumptions used in the accounting for the above benefit plans were as follows:
2011

2010

Primarily 1.8%

Discount rate·························································································

Primarily 1.8%

Expected rate of return on plan assets··················································

Primarily 1.5%

Primarily 1.5%

Amortization period of past service obligation········································

Primarily 5 years

Primarily 5 years

Amortization period of actuarial differences············································

Primarily 5 years

Primarily 5 years

11. Commitments and Contingent Liabilities
The Company and Consolidated Subsidiaries had the following commitments and contingent liabilities:
Thousands of U.S. dollars (Note 1)

Millions of yen
2011
Export drafts discounted·······································································¥

Total································································································

78

¥

30

Trade notes receivable discounted·························································
¥

2011

2010

108

3

$

938

$

1,299

361

32
¥

35

Nipro Corporation Annual Report 2011 42

12. Net Assets
The significant provisions in the Corporate Law of Japan (the“Corporate Law”) that influence financial and accounting matters are
summarized below:(a) Dividends
Under the Corporate Law, companies can pay dividends at any
time during the fiscal year in addition to the year-end dividend upon
resolution at the shareholders meeting. For companies that meetcertain criteria such as (1) having the board of directors, (2) having
independent auditors, (3) having the board of corporate auditors, and(4) the service period of the directors is prescribed as one year rather
than the normal term of two years by its articles of incorporation, theboard of directors may declare dividends (except for dividends in kind)
if the company has prescribed so in its articles of incorporation. The
Company’s present system meets the first three criteria but the twoyear service period of the directors does not meet the fourth criterion.
Interim dividends may also be paid once a year by the resolutionof the board of directors if the articles of incorporation of the company
stipulate so. The Company’s articles of incorporation contain such a
stipulation, and it pays interim dividend semi-annually by the resolutionof the Board of Directors.
The Corporate Law provides certain limitations on the amounts
available for dividends or the purchase of treasury stock.

(b) Increases / decreases and transfer of common
stock, reserve and surplus
The Corporate Law requires that an amount equal to 10% of dividends
must be appropriated as a legal reserve (a component of retained
earnings) or as additional paid-in capital (a component of capitalsurplus) depending on the equity account charged upon the paymentof such dividends until the total of aggregate amount of 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 the shareholders.
The Company’s legal reserve, which is included in retained
earnings, amounted to ¥1,196 million (US$14,384 thousand) as ofMarch 31, 2011, and its additional paid-in capital, which is included incapital surplus, amounted to ¥29,973 million (US$360,469 thousand)as of March 31, 2011.

13. Segment Reporting
Outline of reportable operating segments
Applied ASBJ Statement No.17 “The Revised AccountingStandard for Disclosures of Segments of an Enterprise and RelatedInformation”, the reportable operating segments are components
of an entity for which separate financial information is available andsuch as information is evaluated regularly by the board of director in
deciding how to allocate management resources and in assessing
performance.
We currently operate our business on a stand-alone basis withthe divisional organization and evaluate the performance of sales andmanufacture of each division regardless of their products. Accordingly,
in our business segments, we divide our operations into 3 reportable
operating business segments on the basis of its main products which
each business segment treat with (Medical business, Pharmaceuticals
business and Glass & Materials business.)
Medical business
Domestic division sells injection- and infusion-related products,
artificial organ-related products, highly functional products, dialysisrelated products and diabetes-related products. In the international
division, head office plays the center role and place overseas sales
and manufacturing base for medical equipment and sales injectionand infusion-related products, artificial organ-related products anddiabetic-related products.

43 Nipro Corporation Annual Report 2011

Pharmaceutical business
Mainly, domestic subsidiaries sell and manufacture injectable drug,
oral drugs and products by contract manufacturing like injectablepreparations in kit form (kit preparations)
Glass & Materials businessIn the field of glass for pharmaceutical purposes, we sell glass
for glass tube, glass for ampoule. In the field of glass & materials
products, we sell glass for thermos bottles and glass for lighting
purpose. In addition, we sell container for combination products
and undertake the contract sales of pharmaceuticals related to thecontainer for kit preparations from pharmaceutical company.
In addition, the Companies reformed Glass & Materials business andPharmaceutical business in accordance with ASBJ Statement No.17.
With these applications, sales of container for kit preparations andthe contract sales of pharmaceuticals related to the container for
combination products from pharmaceutical company is transferredfrom Pharmaceutical business segment to Glass & Materials business.
To reflect the results, the companies have restated the figures ofsegment information for prior years to conform to the current year
presentation.

Business segment information for the years ended March 31, 2011 and 2010 was as follows:
Millions of yen
2011
Medical
Net sales: Outside··························· ¥ 132,817
Intersegment··················
1,195
Total·······························
134,012
Operating income·····························
18,437
Identifiable assets····························· ¥ 178,938
Other items
Depreciation and amortization·········· ¥ 11,938
Amortization of goodwill····················
1,504
Investment to companies accounted
for by the equity method·················—
Capital expenditures·························
14,879

Reportable Segment
Pharma­Glass &
ceuticalMaterials¥ 38,005 ¥ 24,704
18,2783,856
56,28328,5601,658
2,701¥ 105,672 ¥ 17,007¥ 195,526
23,329218,855
22,796¥ 301,617

¥

¥

¥

¥

8,296
201

¥

—
6,809

229
39
—
103

20,463
1,744¥ 195,943 ¥—
23,373 		 (23,373)
219,316(23,373)
22,884(5,659)¥ 306,256 ¥ 170,254

Consolidated
financialstatements¥ 195,943—
195,943
17,225¥ 476,510

¥

¥

Other
(Note 1)

Total

417
44
461
88
4,639

¥

55
—

—
21,791

Total——

20,518
1,744

Adjustment(Note 2)¥—
21,791

726
—
1,763
1,532

21,244
1,744
1,763
23,323Thousands of U.S. dollars
2011
Medical
Net sales: Outside··························· $1,597,318
Intersegment··················
14,372
Total······························· 1,611,690
Operating income·····························
221,732
Identifiable assets····························· $2,151,990
Other items
Depreciation and amortization·········· $ 143,571
Amortization of goodwill····················
18,088Investment to companies accounted
for by the equity method·················—
Capital expenditures·························
178,942

Reportable Segment
Pharma­Glass &
ceuticalMaterials$ 457,066 $ 297,102
219,820
46,374
676,886
343,476
19,94032,483$1,270,860 $ 204,534$

99,771
2,417$—
81,888

Other(Note 1)

Total
$2,351,486
280,566
2,632,052
274,155$3,627,384

$

2,755
469

$ 246,097
20,974

$

—
1,239

—
262,069$

Total

Adjustment(Note 2)

5,014
529
5,543
1,058
55,791$2,356,500
281,095
2,637,595
275,213$3,683,175$—(281,095)(281,095)(68,057)$2,047,553

662—$ 246,759
20,974$———
262,069

Consolidated
financialstatements$2,356,500—
2,356,500
207,156$5,730,728

8,731
—

$ 255,490
20,974

21,203
18,425

21,203
280,494

Millions of yen
2010¥ 118,517
174
118,691
19,923¥ 144,113

Reportable Segment
Pharma­Glass &
ceuticalMaterials¥ 34,528 ¥ 24,338
16,711
4,422
51,23928,7602,102
3,103¥ 94,456 ¥ 14,823¥ 177,383
21,307
198,690
25,128¥ 253,392

¥

¥

¥

¥

¥

Medical
Net sales: Outside···························
Intersegment··················
Total·······························
Operating income·····························
Identifiable assets·····························
Other items
Depreciation and amortization··········
Amortization of goodwill····················
Investment to companies accounted
for by the equity method·················
Capital expenditures·························

9,354
85
—
9,665

7,999
210
—
4,596

¥

225
—
—
225

Total

17,578295—
14,486¥ 177,830
21,345
199,175
25,192¥ 258,086—(21,345)(21,345)(7,098)¥ 125,311

Consolidated
financialstatements¥ 177,830—
177,830
18,094¥ 383,397

¥

¥

¥

Other
(Note 1)
¥

447
38
485
64
4,694
59
—
—
—

Total

17,637295—
14,486

Adjustment(Note 2)
¥

784
—
1,964
723

18,421295
1,964
15,209Note:
1. “Other” is the business segment which is not included in the reporting segment and consist of real estate income and sales by headquarters.
2. Adjustment is as follows.
(1) Adjustment for the operating income at March 31, 2011 and 2010 include ¥333 million (US$4,005 thousand) and ¥(304) million of elimination of inter-segment
transaction and ¥(5,992) million (US$(72,063) thousand) and ¥(6,795) million of corporate cost, respectively. Corporate cost consists primarily of sales, general andadministrative expenses and research and development cost which do not belong to the reporting segment.
(2) Adjustment for Identifiable assets at March 31, 2011 and 2010 include ¥(57,266) million (US$(688,707) thousand) and ¥(61,855) million of elimination of inter-segment
transaction and ¥227,520 million (US$2,736,260 thousand) and ¥187,166 million of corporate assets, respectively. Corporate assets consisted primarily of cash anddeposit, investment securities, assets for development and assets for management division of head office which do not belong to the reporting segment.
(3) Adjustment for depreciation and amortization at March 31, 2011 and 2010 are for corporate assets. Depreciation and amortization and Capital expenditures include
long-term prepaid expenses.
(4) Adjustment for capital expenditures is increase in corporate assets.
<Additional information>
Effective from the current fiscal year, we have applied the Revised Accounting Standard for Disclosures about Segments of an Enterprise and Related Information(ASBJ Statement No. 17, issued March 27, 2009) and Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information(ASBJ Guidance No. 20, issued March 21, 2008).
Nipro Corporation Annual Report 2011 44

The information by geographic area for the years ended March 31, 2011 and 2010 was as follows:		
Millions of yen
2011
Japan

America

Europe

Asia

Total

Eliminations/
Corporate

195,943¥

Consolidated

Net sales:
Outside······································¥

146,269¥

27,934¥

12,025

¥

9,715

¥

—

¥

195,943

Intersegment·····························

33,104

1,685

99

16,15851,046(51,046)—

Total··········································

179,373

29,61912,12425,873

246,989(51,046)

195,943

157,173

Operating expenses························

30,56312,01424,251

224,001(45,283)

178,718

Operating income (loss)···················¥

22,200

¥

(944)

¥

110

¥

1,622

¥

22,988¥(5,763)¥

17,225

Property, plant and equipment-net····¥96,384

¥

5,779

¥

141

¥

17,564¥

119,868

¥

8,638

¥

128,506

Thousands of U.S. dollars (Note 1)
2011
Japan

America

Europe

Asia

Total

Eliminations/
Corporate

Consolidated—$ 2,356,500(613,903)—

Net sales:
Outside······································$ 1,759,098

Intersegment·····························

398,124$

335,947$

20,265

144,618$

1,191

116,837$ 2,356,500

194,323

613,903$

Total··········································

2,157,222

356,212145,809311,160

2,970,403(613,903)

2,356,500

Operating expenses························

1,890,234

367,565

144,486

291,654

2,693,939(544,595)

2,149,344

Operating income (loss)···················$

266,988$(11,353)

$

1,323

$

19,506$

276,464$(69,308)$

207,156

Property, plant and equipment-net····$ 1,159,158$

69,501

$

1,696

$

211,232$ 1,441,587$

103,885$ 1,545,472

Total

Eliminations/
Corporate

Consolidated

177,830¥

Millions of yen
2010
Japan

America

EuropeAsia

Net sales:
Outside······································¥

Intersegment·····························

139,379¥

29,444

17,833¥592

12,901

¥

4

7,717

¥

15,32845,368—¥177,830—(45,368)

Total··········································

168,823

18,425

12,90523,045

223,198(45,368)

177,830

Operating expenses························

145,800

18,50912,857

20,856

198,022(38,286)

159,736

Operating income (loss)···················¥

23,023

¥

(84)

¥

48

¥

2,189

¥

25,176¥(7,082)¥

18,094

Property, plant and equipment-net····¥94,932

¥

3,059

¥

111

¥

17,254¥

115,356

¥

8,853

¥

124,209

Note:(1) Operating expenses of “Eliminations/Corporate” for the years ended March 31, 2011 and 2010 included unallocated corporate costs of ¥5,990 million (US$72,038
thousand) and ¥6,787 million, respectively. The unallocated corporate costs consisted primarily of research and development costs and headquarters
administration costs.
(2) The main countries of each geographic area are:America : The United States of America and Brazil
Europe : Belgium
Asia: China, Thailand and Singapore

45 Nipro Corporation Annual Report 2011

Sales to foreign customers were as follows:			Millions of yen
2011

2010

America

Europe

Asia

Total

America

Europe

Asia

Total

overseas subsidiaries·················· ¥ 37,121¥ 20,707¥ 13,210¥ 71,038¥ 27,865¥ 20,662¥ 10,836¥ 59,363

10.6%

6.7%

36.3%

15.7%

11.6%

6.1%

33.4%

Export sales and sales by
Percentage of such sales against
18.9%

consolidated net sales················

Thousands of U.S. dollars (Note 1)
2011
America

Europe

Asia

Total

Export sales and sales byoverseas subsidiaries·················· $ 446,434
Percentage of such sales against
consolidated net sales················

		
18.9%

$ 249,032$ 158,870$ 854,336

		

		

		

10.6%

6.7%

36.3%

14. Selling, General and Administrative Expenses
Significant components of selling, general and administrative expenses for the years ended March 31, 2011 and 2010 are as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen
2011
Salaries····································································································¥

10,358¥

4,685

Freight charges·························································································

2011

2010
8,852

$

124,570
56,344

3,776

15. Reseach and Development Expenses
Research and development expenses for the years ended March 31, 2011 and 2010 were ¥4,977 million (US$59,856 thousand) and ¥4,846
million, respectively.

16. 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
2011

2011

2010

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

¥

2,405
8,217

¥

2,304
4,236

$

28,924
98,821

Nipro Corporation Annual Report 2011 46

Report of Independent Auditors

INDEPENDENT AUDITORS’ REPORT

47 Nipro Corporation Annual Report 2011

Corporate Information (As of March 31, 2011)

Date of Establishment

Common Stock

July 8, 1954

Authorized
IssuedOutstanding
Number of Shareholders

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

200,000,000 shares
63,878,505 shares
63,422,085 shares
18,332

Stock Listings
Tokyo Stock Exchange, Osaka Securities Exchange
Ticker Code: 8086

Tokyo OfficeTransfer Agent

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

Mizuho Trust & Banking Co., Ltd., Osaka Branch,
Stock Transfer Agency Dpt.
2-11-16 Sonezaki, Kita-ku, Osaka 530-0057, Japan

Number of Employees
Parent Company···································································
Consolidated subsidiaries······················································

2,235
9,782

Total······················································································

12,017

Principal Shareholders

Sanri Kosan Co., Ltd.···························
Japan Trustee Services Bank, Ltd.········
Nippon Electric Glass Co., Ltd.·············The Master Trust Bank of Japan, Ltd.···Minoru Sano·········································
Trust & Custody Services Bank, Ltd.·····
Resona Bank Limited···························
Mizuho Corporate Bank, Ltd.················
MLPFS Custody Account·····················
Northern Trust Co. (AVFC)
Sub Account British Client················
Total·····················································

Stock Price Range(Tokyo Stock Exchange)
Number of
Shares Held(in thousands)
12,920
5,702
3,481
3,208
1,993
1,651
1,380
782
748

Percentage ofTotal Shares in
Issue (%)
20.23
8.93
5.45
5.02
3.12
2.59
2.16
1.23
1.17

(Yen)

3,000
2,800
2,600
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000

12

3

6

9

2009

585
32,454

12

3
2010

6

9

12

3
2011

0.92
50.81

Major Subsidiaries and affiliates (As of June 30, 2011 )Area
Domestic

CountryJapan

Name
Nipro Medical Industries Co.,Ltd.
Nipro Pharma Corporation
Nipro Genepha Corporation
Tohoku Nipro Pharmaceutical Corporation
Zensei Pharmaceutical Industries Co.,Ltd.
Nipro Patch Co., Ltd.
Bipha Corporation
Overseas
ThailandNipro (Thailand) Corporation Limited
Nipro Sales (Thailand) Co.,Ltd.
China
Nipro (Shanghai) Co.,Ltd.
Nipro Trading (Shanghai) Co., Ltd.
Chengdu Pingyuan Nipro Pharmaceutical Packaging Co., Ltd.
Jilin Nipro Jiaheng Pharmaceutical Packaging Co., Ltd.
Nipro Medical (Hefei) Co., Ltd.
Shanghai Nissho Vacuum Flask Refill Co.,Ltd.
Singapore
Nipro Asia Pte Ltd.
India
Nipro India Corporation PVT. LTD.
Nipro Glass India LTD.
BrazilNipro Medical Ltda.
U.S.A.
Nipro Medical Corporation
Nipro Diagnostics, Inc.
Belgium
Nipro Europe N.V.
: Affiliate accounted for by the equity method*

Segment
MedicalPharmaceuticalPharmaceuticalPharmaceuticalPharmaceuticalPharmaceuticalPharmaceutical
Medical
Medical
Medical
MedicalGlass & Materials
Glass & Materials
MedicalGlass & Materials
Medical
MedicalGlass & Materials
Medical
Medical
Medical
MedicalPrincipal business
Manufacturing
Manufacturing and Marketing
Manufacturing and Marketing
Manufacturing
Manufacturing and Marketing
Manufacturing and R&D
R&D, Manufacturing and Marketing
Manufacturing
Marketing
Manufacturing and Marketing
Marketing
Manufacturing and Marketing
Manufacturing and Marketing
Manufacturing
MarketingMarketing
Manufacturing and Marketing
Manufacturing and Marketing
Manufacturing and Marketing
Marketing
Manufacturing and Marketing
Marketing*Nipro Corporation Annual Report 2011 48

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