Annual Report 2012
Year Ended March 31, 2012

Movingg Forward With You

Profile

Striving to be the Best in the Global Market
Since the Nipro Corporation was founded in 1954, we have focused on developing our business based on our
technological prowess. Our first breakthrough was the development of an automated processing machine for glass
ampoules. This machine enjoyed an excellent reputation for its efficient production techniques and standardized
product quality.
With expertise accumulated from processing various materials, the Group moved into the medical businessin 1965 through selling infusion sets to pharmaceutical companies. Our mass production technology enabled us
to expand the scope of our business and we hit our stride in 1988 when we started to manufacture the Dialyzer
artificial kidney, which is still one of our leading products to this day. That same year we expanded our business into
pharmaceuticals. Our injectable kit preparations, which combine the drug with the administration system, plays on
our strengths as derived from our experience in manufacturing medical equipment. Since the 1990’s we have also
advanced into overseas markets as well as working to establish global sales hubs. Today the Nipro Group continues
to grow as one of Japan’s leading medical manufacturers, with branches in about 90 locations throughout Europe,
Asia and North and South America.
The corporate philosophy of the Nipro Group is “conducting business from various aspects, contributing tosociety and promoting self-realization with creativity and innovation for the future.” While engaged in active andspeedy business development, our mission is to contribute to progress towards more reassuring, safer medical care,in addition to improving the patient’s QOL (quality of life) through continuous improvement of our products from theperspective of both patients and healthcare professionals. We will provide innovative products that meet customer
needs in addition to striving to excel in the manufacture of medical devices as well as pharmaceuticals, etc.

Contents
1
2
3
7
9
13
15
19
21
22

ProfileConsolidated Financial Highlights
A Message to Our Shareholders and Investors
At a Glance
Global Activities
Research and Development
Plant and Equipment
Status of Corporate Governance, etc.
Corporate Social Responsibility
Board of Directors and Auditors

23
27
29
31
32
33
34
47
48

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

Disclaimer regarding Forward-looking Statements
This report contains forward-looking statements regarding business indices, strategies and performance representing the expectations and judgments of the
management, based on information available to the Company and publishable at the time this report was prepared.
When reading this report, please understand that forward-looking statements involve potential risks and uncertainties; actual future business performance andforecasts may therefore differ materially from those contained in these statements, given the possible emergence of new factors or changes in economic circumstances and/or the business environment.
1 Nipro Corporation Annual Report 2012

Consolidated Financial Highlights

Nipro Corporation and its Consolidated Subsidiaries
Millions of yen
Years ended March 31, 2012 and 2011			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....................................................................
Per share data (in yen and U.S. dollars):
Net income
Basic (*1).................................................................
Diluted (*1)...............................................................
Cash dividends............................................................
Equity (*1).....................................................................

2012

Thousands of
U.S. dollars

2012

2011

¥ 212,013¥ 195,943
15,825		
17,225
4,586		2,45639,525		 23,323
21,581		
21,244
5,957		4,977

$ 2,579,547
192,541
55,798
480,898
262,575
72,478¥ 499,687¥ 476,510
113,951		 109,038$ 6,079,657
1,386,434

¥

$

35.3
¥
31.0		
23.5		
643.9		

19.4
17.4
50.0
839.7

0.43
0.38
0.29
7.83

(*1) Effective the fiscal year ended March 31, 2012, the Company has adopted ASBJ Statement No.2 “Accounting Standard for Earnings Per Share” (June 30, 2010), ASBJ Guidance No.4 “Guidance on Accounting Standard for Earnings Per Share” (June 30, 2010) and ASBJ PITF No.9 “Practical Solution on Accounting for Earnings Per Share” (June30, 2010). In addition, the Company has split one share of common stock into two shares on October 1, 2011 based on the resolution at the board of directors’ meeting heldon August 27, 2011. In accordance with this adoption, equity per share, basic earnings per share and diluted earnings per share are calculated on the assumption that thetwo-for-one stock split of common stock was conducted at the beginning of fiscal year ended March 31, 2011.
The U.S. dollar amounts in this report represent translations of Japanese yen, for convenience only, at the rate of ¥82.19=U.S.$1,
the approximate exchange rate on March 31, 2012.

195,943

212,013

20,00017,225
15,82515,00010,000

5,000

4.2
4,586
2,456

Nipro Corporation Annual Report 2012 2

A Message to Our Shareholders and Investors

Increased revenues
in a challenging
global economic
environment
Concerns continue to be raised
about the ongoing difficulties facing
the global economic environment,such as the smoldering European
economic crisis, the long-term effectsof the high yen and the slowdownof the Chinese economy. However
the Nipro Group of Companies
has achieved increased sales andprofit thanks to its active worldwide
development and cost reductions.

Yoshihiko Sano
President

3 Nipro Corporation Annual Report 2012

On the occasion of the appointment of
a new President
In accordance with the wishes of the late
President Minoru Sano, we will strive to get
to grips with the needs of the medical workplace and deliver consistent results as amanufacturer of medical products.
The late President Sano cherished the company
motto of iyoku, or “will”. The philosophy
behind this motto is for employees to think forthemselves, decide on a course of action andthen reap the rewards. This is the cycle that willlead the company towards growth. In accordance with the wishes of my predecessor, I willfurther strive to develop an open and natural
corporate culture, whilst working to increase thewill of our employees and actively promoting thedevelopment of our business towards the aim of
securing a leading share of the global market.
I believe that “the patient’s perspective” isessential to making this happen. It is not enoughto simply sell the finished product in order todeliver a beneficial product to the patient; we also
have to ensure that we are providing a productthat is appreciated by people in the medical
workplace such as doctors and nurses, etc., notto mention patients, as well as understanding that
there is a need for us to follow up as a company.
From now on we will be putting more effort into
this area as we consider how to create a new
Nipro culture going forward.

Overview of Business Activities andResults during the Current Fiscal Year
Increased sales and profit was secured due
to our rapid recovery following the earthquake and the expansion of our overseas
manufacturing and sales.
During the current fiscal year ended March 31
2012 (FY2011), the global economy was definedby the sovereign debt crisis that erupted inEurope as well as the slowdown in the Chinese
economy, in addition to a continuation of thelong-term trend of the high yen. Domestically, theJapanese economy is in an extremely challenging
position due to a slow recovery following theGreat East Japan Earthquake, the increasingly serious issue of shortages in electrical
power supply due to the influence of the nuclear
accident and rising energy costs, etc.
Under this difficult set of circumstances,

the Nipro Group was able to put into practicethe experience gained from other disasters anddespite the damage inflicted on our businesslocations and plants by the earthquake, a rapid
recovery plan was put in place and implemented.
We will continue to move forward with enlarging
and increasing efficiency at our manufacturing
and sales locations overseas.
As a result of this approach we were able toachieve consolidated sales for this term of ¥212.0
billion (up by 8.2% on the previous year) andoperating income of ¥15,8 billion, a decrease of
8.13% on the previous year Due to a decrease in
extraordinary loss, net profit was ¥4.6 billion, up
by 86.7% on the previous year.

Business Strategy
We will thoroughly reinforce the profitabilityof our investments with the aim of attaining
our long-term goals of ¥500 billion in consolidated sales by fiscal 2020 and growing
this to ¥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 inconsolidated sales by fiscal 2020. This is really agreat plan.
If we are able to increase our sales turnoversteadily by a fixed proportion each fiscal year,
we should be able to attain our stated goals. Of
course, this goal will be difficult to reach if weare just selling the same products, therefore we
intend to move forward with business tie-ups andM&A (corporate mergers and acquisitions) as
necessary so we can say with some confidence
that we will be able to attain our goals.
Naturally, in order to make this happen weneed a strategy to follow that will secure the top
share of the global market. In concrete terms,
Transition and Plan for Consolidated Net Sales (Millions of yen)
600000500,000

500000400000300000200000195,943 212,013

241,000

10000002010 2011 20122020 (FY)

Nipro Corporation Annual Report 2012 4

there are three measures that we need to do.
The first is to utilize our company’s strengths
and secure top-class global market share. In
order to drive our advantages in economies
of scale and diversity as a manufacturer of
medical equipment and pharmaceuticals, itwill be necessary to secure a healthy share of
the market. We are a manufacturer of medical
equipment and, at the same time, we are putting
our efforts into generic drugs. What this makes
possible is product ideas such as the pre-filled
syringe (a product where the drug has alreadybeen filled inside the syringe), a kind of “collaborative product” where our medical equipment andpharmaceutical products have been combined ina product. Moreover, we have begun constructionof new plants in India and China, locations where
the economy is experiencing rapid growth, withthe aim of starting production during fiscal year
2012. We are also planning to put our efforts into
reinforcing our local direct sales model, in orderto supply products to meet the rapidly growing
demand in the field of dialysis centered on Asia.
Furthermore, the Nipro Pharma has established ageneric drug manufacturing base in Vietnam andthe plant is scheduled to start mass-productionof injection drugs in spring 2015.
The second issue is for the company tocreate a system where new products can bebrought to the market in a speedy manner. In
order to make this happen, the company iscommitted to M&A should this be required. In
July of last year Nipro entered into an agreement
to form a strategic business alliance withGerman company Sandoz regarding genericdrug products. In February of this year, Nipro
acquired shares in 4 medical glass manufacturing
companies based in Germany, such as MGlas AG(currently Nipro Glass Germany AG), etc. Goingforward with an accurate grasp of the needs inthe medical workplace, our aim is to utilize themerits of the high yen to identify and acquire
corporations where we can realize high levels ofsynergy.
Moreover, it is also important to invigorate

5 Nipro Corporation Annual Report 2012

the organization to be able to bring new products
to the market in a speedy manner. When an
organization grows, vertical divisions and sectionalism are inevitable to a certain degree and thisin turn leads to waste and an inability to make
rapid and accurate decisions. In order to improve
the horizontal integration across the Nipro Group,
we will create several committees horizontally
across the whole group that will promote productplanning, the development of manufacturing
technologies, the procurement of raw materials
and coordination between manufacturing plants.
Furthermore, it is important that the Nipro
Group builds a product planning and development system that draws upon feedback fromour sales network in order to provide rapid
solutions to meet the needs of the medical
workplace. In real terms, this means reaching
beyond Japanese patients and striving to hear
the direct opinions of patients, medical professionals and people connected with medical institutions all over the world, as we move forwardwith planning and developing products that meetthe needs of the medical workplace. Moreover,
we will select specific medical ventures all over
the world in which to invest as part of our efforts
to develop a system whereby we can respond to
future high-tech medical needs.
The third issue is how we go about creatinga corporate constitution that can ensure that thecorporations and facilities that we have invested
and acquired in turn a profit steadily. In one way,
ensuring a profit from an investment is persistently challenging if your goal is to outstrip yourinvestment, but we feel strongly that this is theway for us to achieve our goals.
The Nipro Group is actively developing its
business overseas and one important issue in thisregard is the risk posed by currency exchange
fluctuations. By diversifying into multiple markets
and dealing in a variety of currencies, we work
to spread and reduce that risk. Going forward
we intend to continue the approach of having
our local production plants supply our local sales
agents directly.

Dividend Policy
Based upon the Nipro Group dividend policyof a 50% payout ratio on a unitary basis, ourdividend for the fiscal year was ¥23.5 pershare.
One of the most important management policiesof the Nipro Group is the return of profits andprofit-sharing is conducted in accordancewith a sliding scale based on the results of thebusiness.
In accordance with this sliding scale
approach, the basis of which is a proper setof performance-based rules to decide profitsharing amongst shareholders, employees andsenior 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 ¥12 per share. At the end of the full
fiscal year, the year-end dividend was paid at¥11.5 per share, giving a total dividend for the
fiscal year of ¥23.5 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
In order to deliver an increase in sales turnover, we will implement an in-depth review
of manufacturing costs as well as working
to reinforce our product power.
Looking at the global economy going forward,
it is clear that the European economies arestagnating and even China, which has been abellwether economy up to now, is experiencing
some kind of slowdown. The yen remains
high and has done so for a while now, and theconcerns continue for the Japanese economy
due to the problem of electrical power supply
following the accident at the nuclear power
station, as well as the high cost of crude oil,
LNG and energy prices.
Under this difficult set of circumstances, theNipro Group will carry out an in-depth reductionin the cost of manufacturing, as well as striving
to improve the quality of our products as partof our efforts to deliver a significant increase insales turnover.
The first step was taken in September
2011 when the Nipro Pharma Corporation was
merged together with three medical pharmaceutical subsidiaries, namely: the Nipro Genepha
Corporation, Nipro Patch Co., Ltd. and the
Tohoku Nipro Pharmaceutical Corporation.
Following this merger, the Group’s pharmaceutical business came under the auspices of acentrally managed system.
By actively implementing these policies
going forward the Nipro Group projects sales
for the coming fiscal year of ¥241.0 billion (upby 13.7% on the previous year) and operating

income of ¥16.0 billion (up by 0.8% on theprevious year) on a consolidated basis and these
are targets that we feel are sufficiently possible
to achieve.

A Message to Our Shareholders andInvestors
By responding to the pressing issues andneeds of the medical workplace, Nipro is
meeting the challenge, day after day, tofulfill its aim of securing the top share of the
global market.
Compared with other industries, one of thecharacteristics of the medical industry is that it
is less likely to be affected by fluctuations in thebusiness. However, we feel that this complacentattitude is misplaced and that Nipro should
react rapidly and appropriately to environmental
changes and by learning to see our industry
from the perspective of the patient, we will beable to develop and improve our products toaccurately respond to the needs of the medical
workplace, as we aim to become a company
that is appreciated by everyone involved in
the medical field. As a company we will never
become fixated on putting sales above all otherthings, as a manufacturer of medical products
we are aiming to secure the top share of the
global market but we also have a social mission
as well as a social responsibility as a corporationthat we have to fulfill. We are confident that aslong as our Nipro culture is firmly establishedand each of our employees has the spirit totrust in their own ideas, our business results willreflect this spirit, regardless of the difficulties
facing the company.
The most impressive management policy,
unless it is linked in some way to concrete
action, will remain a policy in name alone. How
well corporations are able to come together
to implement their policies is instrumental inseparating the wheat from the chaff.
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 2012

Yoshihiko Sano
President

Nipro Corporation Annual Report 2012 6

At a Glance

MedicalOur 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 wehave started our full-scale entry into the field of diabetes-related products.
As one of the world’s top maker of medical devices, we aim to make further
steps for the future.

Main Products

In the Japanese market, the salesof our dialysis system drasticallyincreased from the previous year while
our dialysis-related products, such as
Dialyzer, showed stable growth. We
have also been working on reducing
the running cost of our plants aswell as enhancing our product range
through the development of high-value
products, which has contributed toincreases in profit.

• Injection- and infusion-related products• Artiﬁcial organ-related products• Highly functional products• Dialysis-related products• Diabetic-related products
Net Sales Ratio

68%

As for overseas sales, we havebeen working to expand sales ofdiabetes-related products throughNipro Diagnostics Inc., which became
part of the Nipro Group in 2010. In
addition, we have acquired glassmanufacturing companies in America
and Europe in order to establish afirm foundation in the medical glassbusiness, with the aim of responding
to future demand. At the same time,
we have increased the proportion ofoverseas manufactured products andenabled direct transactions between
overseas plants and overseas
sales bases in order to reduce bothcurrency exchange risks and costs.

(Millions of yen)

2012
Net Sales¥145,082
Operating Income ¥ 17,078

2011¥132,817¥ 18,437

Dialysis-related products
Dialyzer

Diabetes-related products
Blood glucose meters

Artificial heart- and lungrelated products
Oxygenators

7 Nipro Corporation Annual Report 2012

Pharmaceutical

As the largest contract manufacturer group in Japan, we have made progressin the sale of our distinctive products. We also contribute to safety and userfriendliness in the medical field by developing pharmaceutical kit productsthat combine our technology and knowledge of both medical products andpharmaceuticals.

Main Products

As a result of our research and development efforts combined with ourunique technology for drug formulations, as well as our sales activities,
our injectable kit products and artificial
kidney fluid replacement products
recorded good sales. We have steadily
recovered from the damage causedby the Great East Japan Earthquake,so our sales results for the next fiscal
year are expected to show further
increases.
The Nipro Pharma Corporationand 3 other pharmaceutical subsidiaries were integrated in order to makebusiness operations more flexible. In
addition to reinforcing our production
facilities for biosimilars and anticancer drug lines, our Vietnam plant
will start operations in 2015. Our aim• Injectable drugs• Oral drugs• Combination products (Kit products)• External preparations
Net Sales Ratio

19%(Millions of yen)

2012
Net Sales¥40,079
Operating Income ¥ 2,986

2011¥38,005¥ 1,658

is to develop a strong foundation forthe stable supply of high-quality andlow-cost products to meet broadbased global demand.

Kit preparations
Double bag kitsMaterials

We produce high-performance and high-quality glass for use in the medical
field, as well as physical and chemical sciences and industry. We sell heatresistant, impact-resistant and chemically durable glass and high-precision
glass for medical and industrial use.

Main Products

The sales of glass products forpharmaceutical containers showed
positive sales as a result of our aggressive promotion of our Chinese joint
venture.
Our high-quality and low-cost
products have been promoted not
only in Japan but also all over Asia,
especially China, where the demandis expected to grow in the future. Ouradvantage in this regard is our excellent glass processing technology,
which has been cultivated since theestablishment of our Company.

• Glass tubes• Glass for ampoules• Vials and bottles• Glass for thermos bottles• Glass for lighting  purposes
Net Sales Ratio

13%

We have also invested capital in
joint venture businesses in China,
where demand is expected to grow,as well as working hard to establish
a system for local manufacturing andlocal sales.

(Millions of yen)

2012
Net Sales¥26,590
Operating Income ¥ 2,408

2011¥24,704¥ 2,701

Glass products

Nipro Corporation Annual Report 2012 8

Global Activities

Sales Ratio by Region (FY2011)
Asia

9%

Europe11%

America19%

Total Sales

212,013(Millions of yen)61%

Domestic

Ratio of Product Made in Domestic and Overseas
FY2010FY2011

45%

32%

68%
Overseas

Domestic

55%

Demand in the global medical market has been increasing, especially indeveloping countries such as China, India and other Asian and Latin Americancountries. Medical needs have grown rapidly due to the increasing population,rising economic power and establishment of improved healthcare infrastructure
including health insurance systems.
Following our policy to mass-produce high quality products at lower costs andsell these products all over the world, we have established new plants in various
regions, strengthened our presence through our sales offices and reinforced thefoundations of our business through M&A and joint ventures. As a result, overseas
sales increased 16.5% from the previous fiscal year to ¥82.8 billion (US$1,007.1
million) and contributed to our strong consolidated sales results.
The Company currently has 77 sales offices in 37 countries and 30
manufacturing facilities in 12 countries (including facilities under construction),
which will serve as our infrastructure for executing our plan of “local production
for local consumption”. Regarding products sold overseas, this proportion
increased from 32% in FY2010 to 45% in FY2011 due to increasing levels of
production at our plants overseas. This percentage is expected to rise further
to 55% in FY2012. This trend enables the Company to diversify its currency
exchange risk and ensure flexibility in responding to local needs by having
manufacturing close to customers.
The environment surrounding our business is challenging, due toglobal economic stagnation and volatile exchange rates, but the medical,
pharmaceutical and pharmaceutical packing materials businesses still has
great growth potential. We will continue to expand our business throughour global network and excellent human resources in order to contribute to
medical treatments around the world.

Chengdu Pingyuan Nipro
Pharmaceutical Packaging
Co., Ltd.

Nipro Europe N.V. Belgium Head Office

Nipro Tube Glass Limited Badlapur Plant
Sales
Manufacturing

9 Nipro Corporation Annual Report 2012

P.T. Nipro Indonesia JAYA

Message

Managing Director

Kazuo Wakatsuki
Grobal Business Division

Due to the progress of globalization,
we are largely influenced by the rapidlychanging world economy. The environment
surrounding our business is increasingly
affected by government initiatives to cut
medical expenditures, as well as the effectof the long-term appreciating yen. Under
such conditions, we shall never forget theimportance of setting higher goals, evenduring hard times, as we aim to increase
overseas sales to ¥100 billion in fiscal year
2012, ¥250 billion by fiscal 2020 and ¥550
billion by fiscal 2030.
It has been 24 years since Nipro
established its first overseas subsidiary. Now
our overseas facilities have expanded to
37 countries with more than ten thousand
employees working for Nipro throughout
the world. In each area, we provide detailed
support that includes visiting customers
and providing product information. Throughthese activities, I strongly feel that Nipro has
established the position of a high quality
brand that has penetrated deeply into thefield of medical practice as well as the market
itself. Such a community-based structure is
our advantage and serves as an importantbase for responding rapidly to local needsfrom the perspective of the customer.
We will continue to promote our businessexpansion and aim to grow our global market
share through the implementation of “local
production for local consumption” and thefull-scale operation of our new plants. At
the same time, we will work hard to improve
our core product portfolio as well as ourcommodity products in order to realize
steady growth.
Furthermore, we will step up activities
such as the establishment of dialysis centersand scientific activities that promote our
products in order to create new value as acompany. We will not only supply products,
but also develop our customer support
structure to become a total solution provider.

Nipro Diagnostics, Inc.

Nipro (Thailand) Corporation Limited

Nipro Medical Ltda.
Nipro Corporation Annual Report 2012 10

Global Activities

America

17.2%

Rate of Growth Measured
Against the Previous Fiscal Year

Europe14.2%

Rate of Growth Measured
Against the Previous Fiscal YearSales in America increased 17.2% from the previous fiscal year on a
local currency basis.
The Nipro Medical Corporation has worked to reinforce its sales
offices in Latin America. In 2011, new branches and sales offices
were established in 8 locations; Cali and Medellin in Colombia,
Guayaquil in Ecuador, San Pedro Sula in Honduras, Monterrey,
Puebla and Guadalajara in Mexico and La Paz in Bolivia. In addition
to Nipro Medical LTDA., which primarily manufactures and sells
artificial lung-related products and other dialysis-related products, we
also established the Nipro Medical Corporation Produtos Medicos
LTDA. in order to expand sales of diabetes-related products in Brazil.
We now have 27 sales offices in 18 countries in Latin America andcontinue to realize community-based sales in each country. Taking
advantage of this sales network, we will increase our sales of not
only medical devices but also new items such as pharmaceuticalproducts and glass materials for pharmaceutical purposes.
Nipro Diagnostics, Inc. (NDI) manufactures and sells diabetesrelated products such as blood glucose meters and test strips. Since
it was acquired in 2010, we have been making efforts to place NDI’s
products through our global sales network, and as of March 2012,
we have sold NDI products to 57 countries around the world. As
a result, sales of blood glucose test strips increased 19% from theprevious year. In anticipation of future growth, NDI has purchased
two buildings and plans to expand its manufacturing lines, which
will deliver a large increase in production capacity. As a result of
this advanced business approach and our activities in high quality
manufacturing, NDI won the 2011 Manufacturer of the Year Award
from the Manufacturers Association of Florida, out of nearly 18,000
manufacturers.
In July 2011, in order to strengthen our pharmaceutical packing
materials business, we acquired the glass business of Amcor Ltd.,a major packing material manufacturer in Australia, and establishedthe Nipro Glass Americas Corporation in the USA. The company has
3 plants in the USA and provides pharmaceutical containers such asvials to many pharmaceutical companies including the global giants.
We have manufacturing capabilities for high quality glass as well as
for our important customer base in the USA, which is the largest
pharmaceutical market in the world. This acquisition allowed for an
immediate expansion of our global pharmaceutical packing materials
business.

In Europe, sales of our primary products such as dialysis- anddiabetes-related items grew steadily, with a net sales increase of
14.2% from the previous fiscal year on a local currency basis.
As for our dialysis business, we have increased our productportfolio so that we are able to participate in major bids, which often
require being able to provide a complete range of relevant products.
We also made significant progress in securing contracts with major
dialysis providers. This has contributed to strong sales increases ofour core products such as the ELISIO Series of dialyzers, which are
made of hollow fiber material developed and produced in-house.
Moreover, in 2011, we also worked to reinforce our medical glassbusiness in Europe. In July, we acquired manufacturing companies inFrance and Belgium from Amcor, Ltd. (currently named Nipro GlassFrance S.A.S. and Nipro Glass Belgium N.V.). They have 3 plants
in France and 1 plant in Belgium, and also do business with major
pharmaceutical companies based in Europe. The addition of bothcompanies to our group contributed greatly to our sales increasein Europe. Nipro Glass France S.A.S has a machinery division formachine-forming glass containers. The technology from this division
will support the development of our glass business.
In Russia, we entered into a joint venture with a local partnercompany in July in order to manufacture and sell pharmaceuticalglass containers such as vials and cartridges. In this country, whichis in the process of growing its domestic industry, we expect ourplant to come online in the middle of 2012. We plan to have a strong
market position as a result of our rapid entry into the market, ourability to leverage our technology, as well as our partner’s strong
presence.
Furthermore, we also acquired a German glass company MGlas
AG (currently Nipro Glass Germany AG), and its affiliated companies,
in February 2012. In addition to basic pharmaceutical containers
like ampoules and vials, this company manufactures syringes,
and also has a washing and packaging line for sterilized syringes.
The addition of these products to our portfolio is very valuable toour pharmaceutical container business because of the increasing
demand for glass syringes from pharmaceutical companies.

The 2011 Manufacturer of the Year Award from the Manufacturers Association of Florida

Nipro Glass Belgium N.V.

11 Nipro Corporation Annual Report 2012

Asia

41.9%

Rate of Growth Measured
Against the Previous Fiscal Year

China

59.4%

Rate of Growth Measured
Against the Previous Fiscal YearIn Asia, our sales increased 41.9% from the previous fiscal year as aresult of organizing sales systems to respond to increasing medical
needs.
In our group, new plants for manufacturing medical equipment
are under construction in 3 countries in Asia: India, Indonesia and
Bangladesh (please refer to the section “Plants and Equipment”).
These plants will start operations by the end of 2012. We havestarted sales activities to secure orders in each area in order toensure a smooth start to production. Especially in India, the sales
system focuses on the four sales headquarter offices located in
Mumbai, Chennai, Deli and Kolkata.
In Asia, although advanced medical services, such as dialysis
treatment, are still relatively new, the number of potential patients
continues to increase. In 2011, we supported the establishment ofdialysis centers in countries like India, Thailand and Bangladesh. By
using our products in these centers, we are able to introduce ourhigh quality medical services to healthcare workers and provide an
opportunity for training, which will enhance the presence of NIPRO
products.
The glass business continued to grow in India. In April 2011, weinvested capital in Tube Glass Containers Ltd. (currently Nipro Tube
Glass Ltd.), a company that has 4 plants in India for manufacturing
products such as ampoules and vials. Together with Nipro Glass India
Pvt Ltd., which has manufactured and sold glass tubes since 2010,
we have established integrated manufacturing from glass tubes topharmaceutical containers, such as ampoules, etc. As for glass tubes,
Nipro Glass India Pvt Ltd. began to produce higher quality productswith their new glass furnace in October 2011. They also plan to importhigh quality glass made by Nippon Electronic Glass Co., Ltd. We will
work hard to expand our sales and gain larger market share from thiscomprehensive base of pharmaceutical glass in India.
Regarding our pharmaceutical business, the Nipro Pharma
Corporation has plans to build a pharmaceutical manufacturing
plant in Vietnam to provide good quality pharmaceutical products
at a globally competitive cost in order to respond to increasing
competition both in Japan and the rest of the world. Construction will
start in 2012 with the plan to start manufacturing in 2015.
In Bangladesh, we established Nipro JMI Pharma Ltd. witha local partner with whom we already have a joint venture for
manufacturing medical equipment. The pharmaceutical market in thiscountry is expanding by approximately 15% every year. By taking theinitiative to participate in this market, we will promote global sales ofour pharmaceutical products.

Our sales in China increased 59.4% from the previous fiscal year.
Medical needs in China are also increasing rapidly due toeconomic growth and improved medical infrastructure. The numberof dialysis patients is expected to be the largest in the world by 2020,
which is already leading the explosive increase in demand from thiscountry. It is said from a business viewpoint that “whoever leads in
China will be the world leader”, so we consider the acquisition andmaintenance of our market share in China very important even undersuch severe competition.
Under these conditions, Nipro Trading (Shanghai) Co., Ltd has
their offices in 14 locations throughout the country and plans to
set up more offices to build a complete sales system in order to
respond to increasing future demand. In anticipation of severe costcompetition, it is necessary to reduce manufacturing costs. In orderto do so, in 2011 we started building a new plant in Hefei, (Anhui).
Manufacturing our main products, such as dialyzers, in China, which
will grow to be the largest market in the world, is important because
it allows for reduction in costs and production lead time, resulting
in rapid response to the customer needs. This new plant aims tostart operations in 2013 and will serve as a solid base for bothmanufacturing and sales in China.
Our glass business has also developed in China. The market
for pharmaceutical containers, such as ampoules, has expanded
rapidly through an increase in global pharmaceutical contracted
manufacturing as well as domestic demand. This market is expected
to be the world’s largest in the near future. In order to build a solid
position in this potential market, we have operated joint venturecompanies for manufacturing and sales of pharmaceutical glass
containers in Sichuan, Jilin and Henan since the second half of 2010.
By providing our financial and technical support to our local partner’sbase, we can promote our business aggressively. This is a rapidlychanging market but we are promoting our business flexibility withlocal human resources in order to increase our market share.

Nipro India Corporation Pvt. Ltd. Pune Plant

Nipro Medical (Hefei) Co., Ltd.
Nipro Corporation Annual Report 2012 12

Research and Development

Promotion of research and development of both medical equipment
and pharmaceutical products is central to the NIPRO Group. In thisconsolidated fiscal year, the total cost of our R&D activities was ¥6.0
billion (US$72.5 million).

1. Medical BusinessIn the business of medical equipment, higher quality and improved
functionality are being achieved in existing product areas. Steadyprogress has also been achieved in R&D activities for new productareas.
For example, research protocols for stem cells derived fromumbilical blood and the development of cell culture systems havereached the stage of establishing concrete specifications. We are now
making progress towards commercialization under a collaborative
approach involving industry, government and academia.
Regarding artificial organs, an implantable ventricular-assisting
device, developed in collaboration with an American company, isclose to the marketing permission stage.

General-Purpose Medical Equipment Division
In recent years, there has been an increase in products made from
PVC-free materials where the pharmaceutical agent cannot be
absorbed. SAFETOUCH® infusion systems for the domestic market
made from PVC-free materials were released in February 2012. Thissystem can be connected without needles when mixing transfusionmaterials.
The “SAFETOUCH® CATH GA” series went on sale in April 2012and has a large diameter which allows for a high flow volume. This
product includes a safety mechanism to prevent accidental puncture
or connection mistakes. These safety mechanisms are required on the
medical front.
Regarding enteral alimentation products, the “NIPRO Feeding Tube
PU” became a commercial product in January 2012. A specialized
tip shape and a combination of rigid stylets with a PU tube allow
this product to be inserted smoothly in the duodenum. This productreduces the risk of residual liquid in the lumen and the risk of occlusion
due to nutritional supplements.

Circulatory and Interventional Product Division
In the field of PCI (percutaneous coronary intervention) products,
our company started selling “SIDEKICK OZMA X®” PTCA balloon
catheters from September 2011. This product has improved
crossability due to a tip with lower profile, and a hydrophilic coating
featuring new technology. These PTCA balloon catheters use aballoon to expand the stenosis site in cases of acute myocardial
infarction and occlusion of the coronary arteries.
The “Autobahn Slender™” is a guiding catheter that has a relatively
larger ID than our competitors’ products. Nipro started selling thisproduct from January 2012. The device is supposed to be usedmainly as part of the TRI (trans radial intervention) approach, and its
larger ID improves the crossability of treating devices such as PTCA
balloon or stent delivery catheters.

13 Nipro Corporation Annual Report 2012

The “TVAC®-II” is a novel type of thrombus-aspiration catheterwith improved pushability, anti-kinking properties and aspiration
efficiency. Its tapered soft tip also contributes to lesion crossability.
This product went on sale in March 2012. This kind of catheter is used
for the revascularization of coronary occlusions.
In the field of peripheral artery treatment (Endo Vascular Therapy),
we released “RAPID STREAM®” in September 2011. This productis an RX type PTA balloon catheter, making for easier and quicker
exchange of balloon catheters.
The “E-VAC®” thrombus-aspiration catheter is for peripheralarteries (on sale from October 2011). This catheter is mainly used toremove thrombus in lower legs as well as a hemodialysis shunt. Its
specialized tip shape enables to aspirate thrombus around the vessel
wall.

Artificial Organs Division
A membranous artificial lung with a venous reservoir is scheduled
to go on sale in Brazil from the next fiscal year. Preparations for
manufacturing the device were completed in March 2012. This artificiallung has an efficient mechanism to export CO2 and import O2 as a
substitute for a dysfunctional lung in the case of cardiac surgery. Its
venous reservoir also collects and filtrates blood, removes bubbles inthe blood, and adjusts the volume of diluted blood during the surgery.

Pharmaceutical Functional Container Division
Soft and rigid cotton swabs were released in November 2011. This
device, an extracting device for specimens, is used for rapid diagnosisof flu. Easy access to the nasal cavity is possible owing to its uniquefeatures.
Inactivation wipes also went on sale in October 2011. When
medical staff spill or splash an anticancer agent for example, thesewipes can contribute to reducing the risk of cell toxicity owing to theirunique mechanism comprising of three steps (oxidation, reductionand elimination).

Diagnostic Product Division
A novel diagnostic reagent for full-length albumin was released in April
2011. Full-length albumin is different to other albumins because it canbe detected at the early stage of nephropathy. This product is usefulfor the early diagnosis of diabetic nephropathy.
We also plan to sell lithium-measuring reagents that can be easily
used with general-purpose equipment from September 2012. Generallithium preparations are mostly used to improve the condition ofmanic and manic-depressive illness. However, it has to be taken in
conjunction with monitoring of blood levels, because its effective andaddictive ranges are close.
The Research and Development Laboratory has a basic concept ofapproaching to medical needs and problems from unique viewpoints,
and developing high-value added products. The whole research
sphere, from materials to production facilities in the field of medical
devices, is our target.
The total amount of research and development costs in thisdivision for the current fiscal year was ¥2.2 billion (US$27.0 million).
* Based on an exchange rate of USD$ 1= ¥82.19

2. Pharmaceutical BusinessCurrently, in Japan many policies aimed at reducing medical costs
have been adopted due to the aging population, and one of themore effective measures, the promotion of generic drugs, has been
implemented by the Japanese government. Meanwhile, on the
medical front, there is a need for high quality medical care suchas improving patients’ QOL (quality of life) and the safety of healthworkers. In order to meet these needs, we are researching the various
disorders as well as diverse dosage forms for drugs. Our aim is todevelop high quality, affordable drugs to contribute to patients’ QOL,
as well as adding value to products.
The features of our pharmaceutical business are as follows:
1) In Nipro Group plants, we can produce almost all dosage forms
for drugs, such as injectable drugs (produced by plants owned
and managed by the Nipro Pharma Corporation), oral drugs(produced by the Tohoku Nipro Pharmaceutical Corporation,
the Nipro Genepha Corporation and Zensei PharmaceuticalIndustries. Co., Ltd.), as well as drugs for external use (producedby Nipro Patch Co., Ltd.).
2) We can develop materials for medical containers, including
pharmaceutical containers, in cooperation with our Development
Division and Medical Device Manufacturing Division.
3) We have unique technologies such as orally-disintegratingtablets and sustained-release formulations.
Reflecting these unique features, we focus on developing products,
paying attention to issues such as ease of handling in medical practiceand consumption and simplicity of use for patients.

Development of Anti-Cancer Drugs and Biosimilars
In 2012, preparation of manufacturing lines for anti-cancer drugs(injectable drugs) and biosimilars was completed at the Odate Plantof the Nipro Pharma Corporation. In our Research Division, we havebegun to develop these products in anticipation of the completion of
the manufacturing facility.
As for anti-cancer drugs, we are developing safer and higher

quality generic drugs to improve our product line-up. With regard
to biotechnology-based drugs, we have conducted development ofbiosimilars, such as antibody drugs, where the market is expected toshow growth. We are aiming to release these products to the market
post-2016.
Even though it is challenging to produce anti-cancer drugs andbiosimilars, we will continue to strive to offer affordable and highquality generic drugs.

Development of Kit Products
In August 2011, we marketed “Edaravone”, a protecting brain agent(the original drug “RADICUT” was produced by the Mitsubishi Tanabe
Pharma Corporation) that consisted of a premixed, drug housed in a
bag ready to be used for drip infusion. ”Edaravone”, which enables
easy administration, is a highly-valued product because it is used forpatients suffering from acute brain infarction.
In addition, we have marketed the double-bag antibiotic drug
”Piperacillin Sodium” (the original drug PENTCILLIN was produced byToyama Chemical Co., Ltd.) and “Sodium Heparin” pre-filled syringes
for hemodialysis.

Orally-Disintegrating Tablets
In November 2011, we marketed “Donepezil Hydrochloride” OD
tablets (Orally-Disintegrating tablets - the original drug “ARICEPT” wasproduced by Eisai Co., Ltd.) and the allergy drug “Loratadine” (theoriginal drug CLARITIN was produced by MSD K.K.), both of which
dissolve without water in the oral cavity. These products are aimed
at the elderly, who may find it difficult to swallow, as well as for thegeneral convenience of patients taking medication.

Putting Major Generic Drugs on the Market
Other than “Edaravone” and “Donepezil Hydrochloride”, 2011 saw thediabetic drug “Pioglitazone” (the original drug ”ACTOS” was produced
by Takeda Pharmaceutical Co., Ltd.) launched on the market.
The total amount of research and development costs in thisdivision for the current fiscal year was ¥3.7 billion (US$45.5 million).

Research and Development Laboratory
Nipro Corporation Annual Report 2012 14

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
acceptance basis; figures shown do not include consumption tax,etc.) during this consolidated fiscal year totaled ¥33.5 billion (US$408.1
million). Capital investment by business segment is shown below.
The medical business segment made capital investments mainly
to increase production capacity and for production rationalization at
the Company’s Odate Plant and Nipro (Thailand) Corporation Ltd. In
addition, Nipro India Corporation Pvt. Ltd. and Nipro Medical (Hefei)
Co., Ltd. undertook the construction of new plants.
In the pharmaceutical business segment Nipro Pharma Corporation
made capital investments mainly in facilities to manufacture
anticancer drug preparations at the Odate Plant and for infusion
solution preparations at the Ise Plant. Tohoku Nipro Pharmaceutical
Corporation made capital investments for the purpose of recovery
following the Great East Japan Earthquake.

The materials business segment made capital investments mainly
for the production of glass tubes and bottles at the Company’s Otsu
Plant.
Corporate capital investments were made primarily in equipment
and devices for research and development at the Company’s
Research and Development Laboratory and Pharmaceutical ResearchCenter.
The required funds were allocated mainly from owned capital andloans.
There was no material retirement or disposal of plants and equipment.
Millions of yen
Medical··········································
Pharmaceutical······························
Materials········································
Corporate······································
Total··············································¥¥

18,68913,501935
416
33,542Thousands of
U.S. dollars$ 227,388
164,266
11,376
5,061$ 408,091

2. Status of Major Plant and Equipment(1) Reporting Companies
As of March 31, 2012
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¥ 8,638¥ 10,164
¥
961
¥
358
Production Facilities, etc.
(198,026)(Odate, Akita)
Glass Tube Processing
160
111
25
52
Otsu Plant
Materials
Production Facilities, etc.
(4,604)(Otsu, Shiga)—
Tokyo Office
Materials
Sales Facilities
245
37
2,092
(Bunkyo-ku, Tokyo)(441)
Domestic Operations
MedicalSales Facilities
379
550
357
11
21 Branches and(2,566)33 Sales Offices in Japan
Research and Development
Corporate
Research and Development
1,874
544
467
—
Laboratory & Pharmaceutical
Plant and Equipment, etc.
(26,544)
Research Center (Kusatsu, Shiga)
Headquarters
MedicalOther Plant and Equipment
323
377
1,508
2
(Kita-ku, Osaka)
Materials(1,891)
Corporate
Other Plant and Equipment
1,063
1
4,760
—
Leased Assets and Others
Other(Settsu, Osaka, Other)(53,650)		 [21,020] *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$ 105,098$ 123,665$ 11,692$ 4,356
Production Facilities, etc.
(198,026)(Odate, Akita)
Glass Tube Processing
1,947
1,350
304
633
Otsu Plant
Materials
Production Facilities, etc.
(4,604)(Otsu, Shiga)—
Tokyo Office
Materials
Sales Facilities
2,981
450
25,453(Bunkyo-ku, Tokyo)(441)
Domestic Operations
MedicalSales Facilities
4,611
6,692
4,344
134
21 Branches and(2,566)33 Sales Offices in Japan
Research and Development
Corporate
Research and Development
22,801
6,619
5,682
—
Laboratory & Pharmaceutical
Plant and Equipment, etc.
(26,544)
Research Center (Kusatsu, Shiga)
Headquarters
MedicalOther Plant and Equipment
3,930
4,587
18,34824(Kita-ku, Osaka)
Materials(1,891)
Corporate
Other Plant and Equipment
12,933
12
57,915—
Leased Assets and Others
Other(Settsu, Osaka, Other)(53,650)		 [21,020] *Note:(1)15 Nipro Corporation Annual Report 2012

Total
¥ 20,121

Number of Employees(People)
1,217

348

36

2,374

20

1,297

675

2,885

250

2,210

169

5,824

—

Total
$ 244,811

Number of Employees(People)
1,217

4,234

36

28,88420

15,781

675

35,102250

26,889169

70,860—(2) Domestic Subsidiaries
As of March 31, 2012
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)

Tohoku Nipro Pharmaceutical Corporation

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¥ 1,219¥ 1,014¥521¥
14(15,461)
6,526
1,900
1,557
2,191
(104,763)
10,363
4,747
1,247
7,510
(204,890)
—
6,892
3,865
458
(83,841)
2,432

548

1,571

676

839

730

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

2,768

357

12,174620

23,867617

11,215

214

—

3,532

297

333

3,588

131

—

2,024

70

Book Value (Thousands of U.S. dollars)
Buildings and Machinery andLandConstruction in
Structures
Equipment(Area m2)
Progress$ 14,831$ 12,338$ 6,339$170(15,461)
79,401
23,117
18,94426,658(104,763)
126,086
57,75615,172
91,374(204,890)—
83,85447,026
5,572(83,841)
29,590

6,668

19,114

8,225

10,208

8,882

6,716
(21,357)
12,264(9,611)
5,536(16,680)

Total¥

Number of
Employees(People)Total

Number of
Employees(People)$ 33,678

357

148,120620

290,388617

136,452

214—

42,974297

4,052

43,655

131—

24,62670

Nipro Patch Co., Ltd. Kasukabe Plant
Nipro Corporation Annual Report 2012 16

(3) Overseas Subsidiaries
As of March 31, 2012
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¥ 2,983¥ 9,523¥259¥
18
Corporation Limited (Ayutaya, Thailand)
Production Facilities(159,196)
Nipro (Shanghai) Shanghai Plant Medical
Medical Equipment
877
1,907
—
463
Co., Ltd.
(Shanghai, China)
Production Facilities		<40,681> *Note:(2)Nipro Medical Ltda. Brazil Plant (Sorocaba, Medical
Medical Equipment
491
1,346
78
81
Sao Paolo, Brazil)
Production Facilities(73,623)
Medical Equipment
1,214
2,041
476
708
Nipro
Fort Lauderdale Medical
Production Facilities(55,466)
Diagnostics,
Plant
Inc.
(Florida, U.S.A)
		<13,162> *Note:(2)India Plant
Nipro India
Medical
Medical Equipment
0
67
—
5,397
Corporation Pvt. Ltd. (Pune, India)
Production Facilities<210,000> *Note:(2)Hefei Plant
Nipro Medical
Medical
Medical Equipment
—
6
—
4,849
(Hefei) Co., Ltd. (Hefei, China)
Production Facilities<189,877> *Note:(2)Nipro Glass Americas Millville Plant
Materials
Glass Equipment
764
522
83
405
(New Jersey, U.S.A)
Corporation
Production Facilities(194,249)¥ 12,783

Number of
Employees(People)
4,290

3,247

663

1,996

325

4,439

434

5,464

208

4,855

48

1,774

331

CompanyBook Value (Thousands of U.S. dollars)of Segment
Name of Facility Name
by BusinessType of Asset Buildings and Machinery andLandConstruction(Location)
Category
Structures
Equipment(Area m2)
in Progress
Nipro (Thailand)
Thailand Plant
Medical
Medical Equipment$ 36,294$ 115,866$ 3,151$219
Corporation Limited (Ayutaya, Thailand)
Production Facilities(159,196)
Nipro (Shanghai) Shanghai Plant Medical
Medical Equipment
10,67023,203—
5,633
Co., Ltd.
(Shanghai, China)
Production Facilities		<40,681> *Note:(2)Nipro Medical Ltda. Brazil Plant (Sorocaba, Medical
Medical Equipment
5,974
16,376949
986
Sao Paolo, Brazil)
Production Facilities(73,623)
Medical Equipment
14,771
24,833
5,791
8,614
Nipro
Fort Lauderdale Medical
Production Facilities(55,466)
Diagnostics,
Plant
Inc.
(Florida, U.S.A)
		<13,162> *Note:(2)India Plant
Nipro India
Medical
Medical Equipment
0815—
65,665
Corporation Pvt. Ltd. (Pune, India)
Production Facilities<210,000> *Note:(2)Hefei Plant
Nipro Medical
Medical
Medical Equipment—
73—
58,997(Hefei) Co., Ltd. (Hefei, China)
Production Facilities<189,877> *Note:(2)Nipro Glass Americas Millville Plant
Materials
Glass Equipment
9,296
6,350
1010
4,928
(New Jersey, U.S.A)
Corporation
Production Facilities(194,249)

Total$ 155,530

Number of
Employees(People)
4,290

39,506663

24,285325

54,009434

66,480208

59,07048

21,584331

Company

Total

Note:
(1) [21,020] is the area (m2) of major facilities leased to entities other than consolidated subsidiaries.
(2) <40,681>, <13,162> , <210,000> and <189,877> are 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) 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
MedicalMaterials
Corporate
MedicalName of Segment by
Business Category
MedicalMaterials
Corporate
Medical17 Nipro Corporation Annual Report 2012

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)¥
34

Lease Contracts Balance(Millions of yen)
¥
54

		

		

249

606

Annual Lease Payments
Lease Contracts Balance(Thousands of U.S. dollars) (Thousands of U.S. dollars)
$
414
$
657

3,030

7,373

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

Location

Name of Segment
by Business
Category

Nipro Diagnostics,
Inc.

Florida,U.S.A

MedicalNipro India Corporation
Pvt. Ltd.
Nipro Medical (Hefei)
Co., Ltd.
P.T. Nipro Indonesia
JAYA
Nipro JMI Co., Ltd.

Pune,
India
Hefei,
China
Jawa Barat,
Indonesia
Dhaka,
Bangladesh
Matsusaka,
Mie

MedicalNipro Pharma
Corporation
Ise Plant

Company

Location

Medical
Medical
MedicalPharmaceuticalName of Segment
by Business
Category

Nipro Diagnostics,
Inc.

Florida,U.S.A

MedicalNipro India Corporation
Pvt. Ltd.
Nipro Medical (Hefei)
Co., Ltd.
P.T. Nipro Indonesia
JAYA
Nipro JMI Co., Ltd.

Pune,
India
Hefei,
China
Jawa Barat,
Indonesia
Dhaka,
Bangladesh
Matsusaka,
Mie

MedicalNipro Pharma
Corporation
Ise Plant

Medical
Medical
MedicalPharmaceutical

Type of Asset
Blood Glucose Meter
SensorProduction Facilities, etc.
Medical Equipment
Production Facilities, etc.
Medical Equipment
Production Facilities, etc.
Medical Equipment
Production Facilities, etc.
Medical Equipment
Production Facilities, etc.
Infusion Solution Preparation
Production Facilities, etc.

Type of Asset
Blood Glucose Meter
SensorProduction Facilities, etc.
Medical Equipment
Production Facilities, etc.
Medical Equipment
Production Facilities, etc.
Medical Equipment
Production Facilities, etc.
Medical Equipment
Production Facilities, etc.
Infusion Solution Preparation
Production Facilities, etc.

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
¥
444
11,462

5,784

21,445

5,266

6,552

4,407

2,356

1,277

3,284

2,575

Means ofFund Raising
Owned Capital

70,374

260,92064,071

79,71853,62028,665

15,53739,956

31,330Month and Yearof Planned
Completion

June 2011

June 2014

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

Planned Amount of Investment
Means of
Total AmountPaid-in AmountFund Raising(Thousands of U.S. dollars) (Thousands of U.S. dollars)$ 28,823$
5,402
Owned Capital
139,457

Month and Yearof Construction
Start

June 2012
July 2013
August 2012
June 2012
August 2012

Month and Yearof Construction
Start

Month and Yearof Planned
Completion

June 2011

June 2014

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

June 2012
July 2013
August 2012
June 2012
August 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 Odate Plant

Nipro Pharma Corporation Odate Plant
Nipro Corporation Annual Report 2012 18

Status of Corporate Governance

1. System for Corporate Governance(1) System for Corporate Governance and the Reasons
Why this System has been Implemented

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.

(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.
19 Nipro Corporation Annual Report 2012

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

Conceptual Diagram of Corporate Governance

Third Party (i.e. lawyer, accountant)

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.

3. External Directors and External Auditors(1) 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 thefull-time auditor, especially on the matters which could have a material
impact on the group and the status of performance of the internal audit.
Therefore, they are constantly able to independently and objectively
conduct the audit and attend meetings of the Board of Directors to makeappropriate statements or offer advice, so that they sufficiently performthe function and role expected of external directors.

(2) External Auditors
At present, two of the three Auditors are external auditors, one ofwhom is identified as an independent director.

(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 to theexamination of the management of the NIPRO Group from a broader
perspective. With close collaboration with the internal auditor, employees of
the Audit Office, auditors of subsidiaries and accounting auditors, they areable to audit from an objective position so as to ensure the effectiveness ofan integral and effective audit function over the NIPRO Group as a whole.

(5) Content of the policy and criteria regarding the independence
from the reporting company of the election of External Auditors
The Company does not have any criteria or policy in place regarding
independence from the reporting company for the election of external auditors.
However, with regard to such elections, the Company refers to the criteria forjudgment used by the stock exchange in ascertaining independence.

(6) Company’s opinion regarding the status of the election of External 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 andenhance the audit system including an increase in the number of auditors.

(7) Mutual collaboration between External Auditors andthe Internal Audit Division, audits by statutory auditors and audits by accounting auditors and the relationship with our internal 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 the full-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 their fair andindependent opinions.
External auditors strive to facilitate a smooth audit service throughclose collaboration with employees of the Audit Office, the full-time
auditor, auditors of subsidiaries and the accounting auditor.

4. Remuneration paid to Directors and Auditors(1) The total amount of remuneration, the total amount of remuneration by type and the number of directors and auditors eligible for remuneration are shown in the table below.
Millions of yen
Total amount of remuneration by type
Number of
Total amount of
AnnualRetirement eligible corporemuneration
Bonus
rate officers
remuneration
benefits
¥ 299
¥ 103
¥ 153
¥ 43
26

Directors
Auditors
Excluding external
auditors
External auditors 		

6 		
2 		

6
2

—
—

—
—

1
3

Thousands of U.S. dollars
Total amount of remuneration by type
Number ofAnnualRetirement eligible corpoBonusrate officers
remuneration
benefits$ 3,638$ 1,253$ 1,862$ 523
26

Total amount of
remuneration
Directors
Auditors
Excluding external
auditors
External auditors 		

73 		
24 		

73
24

—
—

—
—

1
3

(2) The total amount of remuneration etc. of each director and auditor
As 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 andthe employee’s salary level. Bonuses are calculated by a certain method
based on the sliding scale system in accordance with the results ofthe business. Retirement benefits are granted by the resolution of theBoard of Directors, up to a ceiling determined at the General Meeting ofStockholders.
• Auditor remuneration
The annual remuneration is determined by mutual accord with the auditors.
At present, the total amount of remuneration for directors and auditors isdetermined by a resolution taken at the General Meeting of 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 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
Support Staff for Audit Operations:Certified Public Accountants : 8 people
Other staff		: 3 people
Nipro Corporation Annual Report 2012 20

CSR

Nipro is able to conduct its business due to the support of many
stakeholders such as customers, clients, stockholders, otherinvestors, and the community at large. Under the current harshmanagement conditions, we understand that recognizing our position
in society, as well as taking responsibility for our actions, are basic
management policies required to earn the trust of all stakeholders.
We hope to remain a company which contributes to building a richand comfortable society as well as earnestly addressing a variety ofsocial challenges, including environmental issues.

1. The Stable Supply of Medical Products
As a medical manufacturer, 2011 was the year when we cameto realize the importance of a stable supply of medical products.
Following the Great East Japan Earthquake in March 2011 and thedisastrous floods in Thailand in October that year, some medical
equipment and pharmaceuticals were in short supply.
Following the Great East Japan Earthquake, we dispatched
response teams to visit facilities the same day the disaster struck. We
quickly started maintenance procedures, as well as inspecting andmending dialysis machines. We made efforts to restart almost all of
the dialysis facilities in the disaster area within a couple of days of thequake. In addition, we worked to ease anxiety felt by patients andhealth workers by delivering products such as dialyzers, needles andsyringes, even during a time when many companies were sufferingfrom a decline in their supply capabilities. At our Odate Plant ourelectricity generator came online due to a blackout of the main power
supply. Our plant made a huge contribution to ensuring the stablesupply of medical products by securing raw materials, as well as
running maintenance, inspections and repairing production lines toresume prompt production.
Following the disastrous flooding in Thailand, there were someshortages of medical equipment in Japan due to the damage sufferedto production lines run by Japanese companies in Thailand. During
the floods, the Nipro Thailand Corporation promptly implemented
flood countermeasures, secured raw materials and took immediate
action to prevent a shortage of sterilization equipment. As a result, astable supply of medical equipment was secured and this was able tocover the temporary shortfall in Japan.
No matter how serious the disaster that befalls us is, one missionof this industry is to ensure stable supply of medical equipment andpharmaceuticals. We will implement full-scale preparations for fire,
man-made disasters as well as natural disasters such as earthquakes
and floods, all the while never assuming that the scope could be“beyond our assumptions”.

2. Contributing through Our Products
We believe that we can contribute to people and society through ourbusiness activities. We will make a contribution to society, making
the most use of our technologies and delivering high quality, safe andsecure products to customers.

water and waste products from their body. Appropriate treatment
can be performed by a health worker
using this equipment. This equipment has
a compact design and the wide variety
of automated systems reduce the timeand energy expended by health workers,
contributing to the improvement ofpatients’ QOL (Quality Of Life) by allowing
health workers to spend their time treating
patients with severe or acute conditions
as well as providing guidance to patients.
Furthermore, personal dialysis device
is expected increase the possibility thatpatients who have undergone treatment
in dialysis facilities may be able to receive
Monitoring device for dialysis“NCV-2”treatment at home.

(2) Syringe pump SP-80Bs
Syringe pump “SP-80Bs” features enhanced functions to cover awide range of chemical grouting requirements.
This product is an aid to anesthesia departments and intensivecare units since injection volumes against time can be set automaticallyonce data such as gamma quanta (input), body weight, volume of
medical agent and volume of liquid solution have been inputted.
Moreover, if settings for frequency, time, volume and speed are
inputted, time intervals
and volume per shot
can be calculated
automatically andintermittent repeat
injections can be
Syringe pump SP-80Bs
performed.

3. Action on Environmental Issues
Environmental issues are a current and global issue. The company isdetermined to undertake significant action on this front. Our approachhas been unique.
Nipro is working to combine its scattered distribution warehouses,by consolidating the functions of four warehouses into our Kawashima
Distribution Center in the Kanto region. In the Kansai Region, several
warehouses have been consolidated into our Maishima Distribution
Center. Due to this initiative, we have improved or reduced importdrayage, transport between warehouses and transport routes,
resulting in a reduction in CO2 emissions. In fact, we have succeededin achieving a CO2
reduction of 60t per year
due to the consolidationof distribution
warehouses in Maishimaalone.

(1) Monitoring device for dialysis “NCV-2”; personal
dialysis device “NCV-10”
Patients whose kidney function has declined or has been lost due torenal failure, require essential medical equipment such as monitoring
devices for dialysis and personal dialysis devices to remove excess

21 Nipro Corporation Annual Report 2012

Maishima Distribution CenterBoard of Directors and Auditors

President

Directors

Standing Statutory Auditor

Yoshihiko Sano*

Akihiko Yamabe

Takayuki Nomiya

Mitsutaka Ueda

Statutory Auditors

Managing Directors

Makoto Sato

Tsuyoshi Yamazaki

Kazuo Wakatsuki

Hideo Okamoto

Kiyotaka Yoshioka

Masanobu Iwasa

Toshiaki Masuda

Kyoetsu Kobayashi

Masamichi Wada
Kazumichi Irie

Yozo Sawada
Kimihito Minoura
Hideto Nakamura
Yasushi Kutsukawa
Masayuki Ito
Itsuo Akasaki
Kazuhiko Sano
Akio Shirasu
Hiroshi Yoshida
Hiroshi Sudo
Takeo Kikuchi
Kenichi NishidaToyoshi Yoshida
Koki Hatakeyama* Representative Director

Nipro Corporation Annual Report 2012 22

Financial Review

Overview
In the current period under review (year ended March 31, 2012), theglobal economy transitioned into a turbulent period due to the longterm recession in the US, exposure to China’s decelerating economy
and the ongoing financial crisis in Europe.
Japanese economy, on the other hand, has also experienced harshmanagement conditions caused by high oil prices in addition to theGreat East Japan Earthquake, which has depressed the Japanese
economy in addition to the serious challenges of electricity supply
following the issue and controversy surrounding nuclear power plants.
Under such conditions, the Nipro Group has been able toimplement a rapid recovery of some of its affected sales locations
and plants where output was suspended due to damage sustained
during the earthquake. We are also continuously working to secure theperformance and output from our sales locations and plants overseas.

Consolidated Business Results
Net Sales
In the year ended March 31, 2012, consolidated net sales amounted to¥212.0 billion (US$2,579.5million), an increase of 8.2% compared withthe previous fiscal year.

Net Sales by Business Segment
Medical BusinessLooking at the domestic market, business conditions were extremely
severe due to the lagging recovery from the Great East Japan Earthquake
and the continuing economic downturn. Under such circumstances,sales of our auto-adjusting dialysis machines such as Dialysis Monitoring
Equipment “NCV-2”, our dialysis-related pharmaceutical products suchas “SUBPACK® Bi” hemodiafiltration substitution fluid, “Heparin Sodium
Prefilled Syringe” blood coagulation inhibitors and dialysis-related
products such as our hemodiafilter “MAXIFLUX®” showed strong
growth. Enteral-alimentation-related products such as “Calm Solid”
semisolid foods and alimentation catheters, testing-related products
such as glucose analysis devices, vascular-related products such as“ABYSS®” PTA guide wires, “COROFLEX” coronary artery stents andCVS (cardiovascular surgery) related products such as extracorporeal
ventricular assist devices and their drive/motor units recorded positive
sales. Sales trends in transfusion- and injection-related products as well
as hollow fiber dialyzers have displayed a gradual recovery, even thoughsales have decreased and remain temporarily flat due to the earthquake.
Overseas sales, on the other hand, have been affected byappreciation of the yen against the US dollar and euro in the foreignexchange markets, but from the beginning of this fiscal year, products
manufactured in overseas plants started to be sold directly to overseas
clients, which has served to reduce the exchange risk as well as enabling
community-based sales to realize a stable supply of our products.
As a consequence of this shift, sales in diabetic-related products
have showed remarkable progress in the global market. We have also
seen dramatic increases in sales of dialysis-related products, such as
the dialyzer, dialysis machines and indwelling needles. Moreover, Nipro
Glass Americas Corporation, Nipro Glass France S.A.S. and Nipro
Glass Belgium N.V., all joined the Nipro Group this fiscal year. TheseNet Sales (Millions of yen)

companies, along with Nipro Glass India Ltd., enjoy a reputation for highquality and steady growth.
As a result, net sales of this business increased 9.2% from theprevious fiscal year to ¥145.1 billion (US$1,765.2 million).
Pharmaceutical BusinessThis business consists of two main divisions: the Generic Drugs Division,
providing low cost and high quality medical drugs, and the Contracted
Manufacturing Division, offering high value-added products to meetcustomer needs.
Sales of generic drugs are expected to grow in line with the market,
due in part to a government policy for the dissemination of genericproducts which aims to expand the quantitative share of the market for
generic drugs to over 30% by the end of fiscal year 2012. Consequently
a number of policies have been implemented to encourage the use ofgeneric products. Major pharmaceutical manufacturers have made a fullscale entry into the Japanese market and foreign generic manufacturers
have strengthened their marketing strategies, making the competitiveenvironment surrounding the domestic market more severe.
Under these conditions, we have tried to secure a high share of theoral drug market through reinforcing our sales promotions to dispensing
pharmacies and by combining with drug wholesalers. In addition, as aresult of our detailed information service provided mainly to hospitals
subject to the DPC system (Diagnostic Procedure Combination; acomprehensive payment system for medical costs incurred duringhospitalization for an acute condition), sales have remained steady,especially of our new products.
Looking at sales of our contracted manufacturing business, we haveworked hard at realizing a variety of detailed services such as contracted
development and supporting value-added initiatives other than ourordinary contracted manufacturing businesses. Though the effect of theGreat East Japan Earthquake reduced operational capacity in someplants during first half of the year, a number of large-scale products havelaunched and the sales for the whole fiscal year in this division haveexceeded sales for the previous term.
As a result, net sales of this business increased 5.5% from theprevious fiscal year to ¥40.1 billion (US$487.6 million).
Materials Business
Sales of material glass tubes for ampoules, a type of pharmaceuticalglass tube, decreased from the previous year due to the stagnationof domestic demand. In contrast, sales of glass tube material for tube
bottles increased because domestic demand has risen steadily andoverseas sales have also been progressing smooth. India, China andRussia have shown steady sales results as a new market due to thegrowth of the pharmaceutical glass business in these countries.
As for other glass-related products, in addition to favorable growthin export sales, special demand in the domestic market following theGreat East Japan Earthquake resulted in increased sales for glass
used in thermos bottles. Meanwhile, in the field of glass for lighting,our operating capacity in automotive bulb manufacture recovered fromthe impact of the earthquake but demand for LCD backlight glass
decreased due to the penetration of LED displays. Overall, sales of bothglass products for lighting and material glass tubes for bulbs decreased
from the previous year.
In the field of pharmaceutical containers, sales of rubber stoppers
for pharmaceutical use, bags for antimicrobial agents and kit form
Income Before Income Taxes andMinority Interests (Millions of yen)

Operating Income (MIillions of yen)

250,000

195,943

212,013

18,09420,000200,000 172,113 175,945 177,830

16,000150,000

12,00013,677

17,225

14,77518,00015,825

13,872

15,00011,022

12,0009,000

100,000

8,000

50,000

4,000

8,260

9,379
7,432

6,000

2008

2009

2010

2011

23 Nipro Corporation Annual Report 2012

2012

3,000

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

containers increased steadily based on our processing techniques
for plastics, metal and rubber. However, sales of pre-filled syringe
components decreased slightly.
As for medical preparation and administration related devices,
sales increased positively and we are moving forward with thecommercialization of our products by both proprietary development andjoint development with pharmaceutical companies so as to meet thediverse needs of the market.
Furthermore, we shall continue to promote contract manufacturing
and development through cooperation with domestic and overseas
pharmaceutical companies as part of a general life cycle management
approach for pharmaceuticals, including antiseptic-free eye drop
bottles, dental devices and diagnostic devices (other than thedevelopment of pharmaceutical combination products), systematizationof self injection at home, and modification of dosage channels such as
orally disintegrating tablets which can be taken without water.
As a result, net sales of this business increased 7.6% from theprevious fiscal year to ¥26.6 billion (US$323.5 million).

with the previous fiscal year to ¥46.9 billion (US$571.1 million), mainly
as a result of the addition of Nipro India Corporation PVT. LTD and 9other companies into the scope of consolidation and an increase in theamortization of goodwill.

Other Business
Sales from real estate rental income decreased 37.2% from the previous
fiscal year to ¥0.3 billion (US$3.2 million).

Pharmaceutical Business
Operating income of the Pharmaceutical business increased 80.1%
compared with the previous fiscal year to ¥3.0 billion (US$36.3
million), resulting from improved productivity of tablets and other newly
marketed generic drugs.

Net Sales by Geographic Area
Japan
In Japan, net sales increased 3.5% compared with the previous fiscal
year to ¥129.2 billion (US$1,572.4 million) due to steady sales in our
Medical and Pharmaceutical businesses.

As a result of the aforementioned factors, operating income decreased
8.1% compared with the previous fiscal year to ¥15.8 billion (US$192.5
million). The ratio of operating income to net sales decreased 1.3
percentage points to 7.5%, owing to an increase in sales, general andadministrative expenses.

Operating Income by Business Segment
Medical Business
Operating income of the Medical business decreased 7.4% comparedwith the previous fiscal year to ¥17.1 billion (US207.8 million), due
to the effect of the exchange rate and increases in depreciation andamortization.

Materials Business
Operating income of the Materials business decreased 10.8%
compared with the previous fiscal year to ¥2.4 billion (US$29.3 million),
due to expenses incurred establishing a business in China.

America
In America, net sales increased 9.2% compared with the previous
fiscal year to ¥40.5 billion (US$493.0 million). The major reason of theincrease was the acquisition of the glass business from Amcor, Ltd. in
July 2011.

Other Business
Operating income of Other business amounted to ¥0.2 billion (US$2.8
million), mainly from real estate rental income.

EuropeIn Europe, net sales increased 11.8% compared with the previous
fiscal year to ¥23.1 billion (US$281.5 million) due to the fine sales of
dialysis and other products and the effect of the acquisition of the glassbusiness from Amcor, Ltd. in July 2011.
Asia
In Asia, net sales increased 44.7% compared with the previous fiscal
year to ¥19.1 billion (US$232.6 million) due to a great expansion ofsales of dialysis- and diabetes-related products in the Asian market.

Cost of Sales
The cost of sales increased 8.3% compared with the previous fiscal
year to ¥149.3 billion (US$1,816.0 million). The increase correspondedwith the increase in net sales, however, the ratio of cost of sales to net
sales increased 0.1 percentage points compared with the previous
fiscal year to 70.4%, mainly due to the addition to the Group of Nipro
Glass India Ltd. and other glass business companies, which have ahigher cost of sales ratio.
As a result, gross profit increased 7.9% compared with the previous
fiscal year to ¥62.8 billion (US$763.6 million).

Sales, General and Administrative Expenses
Sales, general and administrative expenses increased 14.6% compared
Net Income (Millions of yen)

Operating Income

Adjustment
Unallocated corporate costs, consisting mainly of R&D-related
expenses and headquarters administration expenses, increased 21.5%
compared with the previous fiscal year to ¥6.9 billion (US$83.7 million)
mainly due to increases in experimental and research expenses.

Other Income (Expenses)
We recorded other expenses of ¥4.8 billion (US$58.4 million) comparedwith other expenses of ¥9.8 billion in the previous fiscal year. In the
period under review, we recorded ¥2.0 billion (US$24.3 million) in
exchange loss, a decrease of 18.3% compared with the previous fiscal
year, while interest expenses increased 36.1% compared with theprevious fiscal year to ¥3.3 billion (US$40.2 million). The total for otherexpenses decreased from the previous fiscal year, due to the ¥5.3 billion
of loss on disaster following the Great East Japan Earthquake that wasrecorded in the previous fiscal year.

Income before Income Taxes and Minority Interests
As a result of the factors outlined above, income before income taxes
and minority interests increased 48.3% compared with the previous
fiscal year to ¥11.0 billion (US$134.1 million).

Income Taxes
Income taxes, including deferred taxes, increased 30.0% comparedwith the previous fiscal year to ¥60.0 billion (US$73.1 million) due to

Capital Expenditures (Millions of yen)

10,000Total Assets (Millions of yen)
600,000

50,00039,525
7,253

8,000

40,000476,510500,000

33,142400,000 349,302

6,000

4,454

4,586

4,531

4,000

30,00025,90023,32320,0002,000

200,000

10,000

2008

2009

2010

2011

2012

383,397
330,641

300,000

15,2092,456

499,687

100,000

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

Nipro Corporation Annual Report 2012 24

the increase in income before income taxes and minority interests.
The effective tax rate was 54.5%, lower than the rate of 62.2% for theprevious fiscal year, mainly because of a decrease in losses for the
consolidated subsidiaries for which valuation allowance on deferred tax
assets was provided.

Minority Interests in Income from Consolidated Subsidiaries
Minority interests in net income from consolidated subsidiaries
amounted to ¥0.4 billion (US$5.2 million).

Net Income
Net income increased 86.7% compared with the previous fiscal year to¥4.6 billion (US$55.8 million). Net income per share increased to ¥35.3(US$0.43) from ¥19.4 for the previous fiscal year after adjustment of thestock split. Return on equity increased 2.0 percentage points to 4.2%
from 2.2% for the previous fiscal year because of the higher net income.

Financial Position
Total assets as of March 31, 2012 stood at ¥499.7 billion (US$6,079.7
million), an increase of 4.9% from the end of the previous fiscal year.
Current assets increased 15.4% from the end of the previous fiscal
year to ¥250.4 billion (US$3,047.0 million), due mainly to the increase intime deposits (over three months), trade notes and accounts receivableand inventories.
Property, plant and equipment, net of accumulated depreciation,
stood at ¥145.7 billion (US$1,772.5million), an increase of 13.4%
compared with the previous fiscal year.
Capital investments in property, plant and equipment totaled ¥33.5
billion (US$408.1 million). By business segment, capital investments
amounted to ¥18.7 billion (US$227.4 million) in the Medical businessand ¥13.5 billion (US$164.3 million) in the Pharmaceutical business.
Intangible assets increased 41.2% to ¥19.2 billion (US$233.0 million)
due to an increase in goodwill.
Investment and other assets decreased 28.1% to ¥84.4 billion(US$1,027.1 million), due mainly to a decrease in investment securities.
Current liabilities increased 7.2% from the end of the previous fiscal
year to ¥189.1 billion (US$2,300.6 million), mainly due to an increase incurrent portion of long-term debt.
Long-term liabilities increased 2.9% from the end of the previous
fiscal year to ¥196.6 billion (US$2,392.6 million), owing to an increase inlong-term debt.
Total net assets increased 4.5% from the end of the previous
fiscal year to ¥114.0 billion (US$1,386.4 million), due to an increase incommon stock.

Cash Flow
Net cash provided by operating activities decreased 29.0% comparedwith the previous period to ¥15.5 billion (US$ 188.4 million), mainly
because of an increase in inventories.
Net cash used in investing activities amounted to ¥67.9 billion(US$ 826.4 million), mainly due to purchases of property, plants and adecrease in equipment and deposits (over three months).
Net cash provided by financing activities amounted to ¥45.7 billion(US$556.3 million) as a result of proceeds from long-term loans andNet Assets (Millions of yen)issuance of common stock.
As a result, net cash and cash equivalents increased ¥0.5 billion
compared with the end of the previous fiscal year to ¥79.5 billion(US$966.7 million).

Staff
Total number of employees at the end of the period under review
increased 2,549 compared with the end of the previous fiscal year to
14,566. Employees in Japan increased 222 to 5,227, and the overseas
employees increased 2,327 to 9,339.

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, 2012.

(1) Risks Related to Product Safety
The Nipro Group brings all of its capabilities to bear in securing productsafety in the design, development and manufacturing of medical
equipment and pharmaceutical products. There are still the risks,
however, that accidental defects or side-effects could result in damages
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 operational results 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 toacquire a sufficient quantity of materials or parts to meet our productionneeds in a timely and cost-effective manner, there could be a material
adverse effect on our operational results 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 the regulations
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 respond to changes inthe environment brought about by unforeseeable wholesale changes in

Basic Earnings Per Share (yen)150,000

Number of Employees

116,071

120,000

109,038

113,951

96,56014,566

16,000150

119,544114.4

12,017120

90,00090

60,00060

30,00030

12,000

70.2

9,020

9,354

2008

2009

9,939

71.4
8,000

35.3

2008

2009

2010

2011

25 Nipro Corporation Annual Report 2012

2012

4,000

19.4

2008

2009

2010

2011

2012

2010

2011

2012

the government healthcare policies, there could be a material adverse
effect on our operational results and financial condition.

as 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 value ofthese investments decline significantly owing to fluctuations in the stock
market, circumstances at an issuer, or a change in the accounting
methods used to deal with these investments, there could be a material
adverse effect on our operational results and financial condition.

(4) Risks Related to Changes in Sale Prices
The products sold by the Nipro Group include some that are, in general,subject every two years to the effect of price reductions in the systemof payment for medical care, drug prices and reimbursement prices
for medical materials and supplies. Moreover, should measures tohold 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 be a material
adverse effect on our operational results 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 operational
results 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 operational results andfinancial 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 theCompany, based on the 25th article of the antitrust law. The claimed
amount was ¥2,032 million (US$24,723 thousand, based on a rate of
US$1=¥82.19). The Company is arguing, among others, the occurrenceof the damage and the correlation between the act and the 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 operational results andfinancial 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 be amaterial adverse effect on our operational results and financial condition.

(7) Risks Related to Intellectual Property(13) Risk Related to Fund Raising

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 thepatents and proprietary rights of any third party, and to avoid breaching
any license agreements we have concluded concerning technologies.
Nevertheless, if an unanticipated claim for damages were to be madeby a third party and the defense of the Nipro Group were to be rejected,
there could be a material adverse effect on its operational results andfinancial condition.

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 we need themon 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 operational results and financial condition.

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

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

The Nipro Group has conducted M&A activity and entered into businessalliances to reinforce its business base. Prior to concluding these deals,
we conduct a thorough investigation of the target company. However,in the event that problems arise such as the discovery of unrecognizedliabilities and should the development of the acquired business notproceed as planned, there could be a material adverse effect on its
operational results and financial 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 operational results and financial condition.

(15) Other Risks
Fire, earthquake, terrorist act, war, epidemic, or other unforeseen manmade or natural disasters affecting areas or facilities where the Nipro
Group conducts its business activities may possibly cause a delay orinterruption in production, sales, distribution, or provision of services.
Should such a delay or interruption become extended, there could be amaterial adverse effect on our operational results 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 such
Equity Ratio (%)

Return on Assets (%)

40.0

6.0

33.8
28.7

29.8

5.0

30.0

22.4

22.0

Return on Equity (%)
5.1

4.0

4.3

8.0

4.0

6.9

6.0

3.2

4.0

3.7
3.0

20.0

4.2

4.2

4.0

2.2
2.0
10.0

2.0
1.0

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

Nipro Corporation Annual Report 2012 26

10 Year Summary

Nipro Corporation and its Consolidated Subsidiaries
Years ended March 31

Millions of yen
2012
Income Statement Data:
Net sales·····················································································
Medical (*1)···········································································
Pharmaceutical (*1)·······························································
Materials (*1)·········································································
Other (*1)···············································································Store (*1)···············································································
Cost of sales···············································································
Selling, general and administrative expenses·······························
Operating income········································································
Medical (*2)···········································································
Pharmaceutical (*2)·······························································
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···················································································

¥

¥

2011

212,013145,082
40,07926,590262—
149,253
46,935
15,825
17,078
2,986
2,408
230
—
11,022
4,586
39,525
21,581
5,957¥

499,687
145,679
61,346
189,090
196,646
84,398636
113,951¥

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
28,66329,973109,038

2009

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

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

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

¥

114.4
114.1
53.0
1,802.3

¥

71.4
—
32.0
1,498.5

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

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

¥

35.3
31.0
23.5
643.9

¥

19.4
17.4
50.0
839.7

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

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

63,878,505
9,939

63,878,505
9,354

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

22.0
3.2
4.2
17.5

22.4
4.0
2.2
42.5

29.8
5.1
6.9
15.8

28.7
4.3
4.2
21.5

(*1) Effective the fiscal year ended March 31,2011, the Company has adopted ASBJ Statement No.17 “Accounting Standard for Disclosures about Segment of 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.” (March 21, 2008) Net sales and operating income for the period for the fiscal year ended March 31, 2010 have been restatedto show what the Group’s result would have been if the new accounting standards had been applied in that year. Before the fiscal year ended March 31, 2009, net
sales and operating income have 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 14. “Segment Reporting” to the consolidated financial
statements.
(*3) Effective the fiscal year ended March 31, 2012, the Company has adopted ASBJ Statement No.2 “Accounting Standard for Earnings Per Share” (June 30, 2010),
ASBJ Guidance No.4 “Guidance on Accounting Standard for Earnings Per Share” (June 30, 2010) and ASBJ PITF No.9 “Practical Solution on Accounting for
Earnings Per Share” (June 30, 2010). In addition, the Company has split one share of common stock into two shares on October 1, 2011 based on the resolution
27 Nipro Corporation Annual Report 2012

Thousands of
U.S. dollars(Note 1)Millions of yen
2008
¥

2007

172,113
111,084
48,754
11,437838—
123,108
35,32813,677
15,830
3,271
1,890
13

¥

—
8,260
4,454
25,90015,054
6,194¥

349,302
118,81253,911
108,835
120,923
28,66329,975
119,5442006

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

¥

270
16,776
8,555
23,093
12,4704,461¥

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

2005

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

¥

578
9,061
4,513
20,874
12,315
3,760¥

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

2004

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

2012

2003

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
14,5009,819
3,074

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

$

1,815,951
571,055
192,541
207,787
36,33029,2982,798—
134,104
55,798
480,898
262,575
72,478

1,109
8,781
5,078
20,775
8,767
2,328

¥

293,749
98,78839,12396,242
99,19828,66329,972
98,309¥279,701
94,00528,57096,36486,932
28,66329,972
96,405¥

252,848
91,14727,542
88,88978,65728,66329,97285,302$

6,079,657
1,772,467
746,3932,300,645
2,392,578
1,026,865
7,738
1,386,434
U.S. dollars(Note 1)

¥

69.4
—
38.5
1,519.6

¥

64.9
—
30.5
1,487.5

¥

84.3
78.5
32.0
1,310.7

$

0.43
0.38
0.29
7.83

Yen
¥

70.2
—
37.5
1,861.8

¥

134.7
—
80.0
1,979.2

¥

69.6
—
37.5
1,767.7

2,579,547
1,765,203
487,638
323,519
3,187

63,878,505
9,020

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

33.8
4.0
3.7
24.8

37.3
3.9
7.2
17.1

33.2
3.9
4.3
26.0

32.9
3.6
4.7
25.6

33.9
4.7
4.7
24.1

33.0
6.0
6.4
21.5

at the board of directors’ meeting held on August 27, 2011. In accordance with this adoption, equity per share, basic earnings per share and diluted earnings per
share are calculated on the assumption that the two-for-one stock split of common stock was conducted at the beginning of fiscal year ended March 31, 2011.
Before the fiscal year ended March 31, 2010, each amount has been stated in compliance with previous accounting rules.
(*4) Equity ratio is the ratio of the sum of total shareholders’ equity and accumulated other comprehensive income to total assets at the period end. Return on assets
is the ratio of operating income for the period to average of total assets during the period. Return on equity is the ratio of net income for the period to average 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 2012 28

Consolidated Balance Sheets

Nipro Corporation and its Consolidated Subsidiaries
As of March 31, 2012 and 2011

Millions of yen
2012

2011

Thousands of U.S. dollars(Note 1)
2012

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

79,450¥78,922$966,663

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

16,2882,194

198,176

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

68,642

61,237835,162

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

(361)

(414)

(4,392)Inventories (Note 3) · ·········································································

71,60460,943871,201

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

4,830

4,204

58,766

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

9,983

9,936

121,462

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

250,436

217,0223,047,038

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

20,447

20,115

248,777

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

116,879

111,353

1,422,059

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

172,065

164,119

2,093,503

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

26,958

8,990

327,996336,349

304,577

4,092,335

Accumulated depreciation·································································(190,670)(176,071)(2,319,868)

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

145,679

128,506

1,772,467

Intangible assets (Note 5):
Goodwill····························································································

11,895

7,834

144,726

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

7,256

5,734

88,282

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

19,151

13,568233,008

and an affiliate accounted for by the equity method · ··················

12,21016,685

148,558

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

59,62088,879725,392

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

606

1,706

7,373

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

6,597

2,490

80,265Investments and other assets:
Investment in unconsolidated subsidiaries

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

5,388

7,654

65,556

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

84,421

117,414

1,027,144

476,510$ 6,079,657

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

29 Nipro Corporation Annual Report 2012¥

499,687¥

Millions of yen
2012

2011

Thousands of U.S. dollars(Note 1)2012

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

63,258¥67,373$

769,656

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

50,87434,286

618,980

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

37,72133,582458,948

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

3,277

3,166

39,871

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

11,974

11,174

145,687

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

1,955

1,955

23,786

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

10,00010,000121,669

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

6,331

7,976

77,029Provision for loss on disaster·····························································

—

4,040

—

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

3,700

2,849

45,019Total current liabilities····································································

189,090

176,4012,300,645

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

189,380

178,550

2,304,173

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

1,988

1,616

24,188Deferred income taxes (Note 4)·························································

1,761

7,465

21,426

Other long-term liabilities···································································

3,517

3,440

42,791

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

196,646

191,071

2,392,578

84,39828,663

1,026,865

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

636

29,973

7,738

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

48,38946,631

588,746

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

(865)

(864)

(10,524)

Long-term liabilities:

Commitments and contingent liabilities (Note 12)
Net Assets (Note 13):
Common stock ················································································
Authorized: 400,000,000 shares in 2012 and 200,000,000 shares in 2011
Issued : 171,459,479 shares in 2012 and 63,878,505 shares in 2011

(913,612 shares in 2012 and 456,420 shares in 2011)
Total shareholders’ equity··························································

132,558

104,4031,612,825

Unrealized gain (loss) on available-for-sale securities··························(6,528)

11,388(79,426)

Foreign currency translation adjustments···········································(16,209)(9,281)(197,214)

Accumulated other comprehensive income·······························(22,737)

2,107(276,640)

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

4,130

2,528

50,249Total net assets············································································

113,951

109,038

1,386,434

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

499,687¥

476,510$

6,079,657

The accompanying notes are an integral part of these statements.

Nipro Corporation Annual Report 2012 30

Consolidated Statements of Income

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2012 and 2011

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

2012
212,013
149,253
62,760¥2011
195,943
137,768
58,175

Thousands of U.S. dollars(Note 1)2012$
2,579,547
1,815,951
763,596

Selling, general and administrative expenses (Notes 15 and 16)
Operating income··············································································

46,935
15,82540,95017,225571,055
192,541

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)··························
Reversal of provision (Provision) for loss on disaster · ························
Other income (loss)-net·····································································
Income before income taxes and minority interests

1,386(3,308)(348)(1,997)
(84)
—
(529)
—
—
117
(40)
11,022

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

16,863(40,248)(4,234)(24,297)(1,022)—(6,436)
—
—
1,424
(487)
134,104

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

6,203
(197)

6,371
(1,751)75,471(2,397)

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

5,016

2,812

61,030Minority interests in income (loss) of consolidated subsidiaries
Net income························································································

¥

430
4,586

¥

356
2,456

$

U.S. dollars(Note 1)

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

35.3
31.0
23.5

5,232
55,798

0.43
0.38
0.29

19.4
17.4
50.0

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, 2012 and 2011

Millions of yen
Net income before minority interests··············································
Other comprehensive income:		 Unrealized gain (loss) on available-for-sale securities·······················
		 Foreign currency translation adjustment·········································
Comprehensive income······································································
Comprehensive income attributable to:		 Shareholders of the parent·····························································
		 Minority interests············································································
The accompanying notes are an integral part of these statements.
31 Nipro Corporation Annual Report 2012

¥

2012
5,016

¥

(17,915)(6,984)(19,883)(20,258)
375

¥

2011
2,812

¥

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

Thousands of U.S. dollars(Note 1)
2012$
61,030$(217,971)(84,974)(241,915)(246,478)
4,563

Consolidated Statements of Changes in Net Assets

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2012 and 2011

Millions of yen

Thousands

Balance at March 31, 2010····

Outstanding
number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

63,423¥28,663¥29,973

Treasury
stock

Total
shareholders’equityUnrealized
gain onavailable-for-salesecurities¥15,024

Foreign
Accumulated
currency
other comtranslation prehensive
incomeadjustments¥47,220¥(862) ¥104,994

2,456

2,456

2,456

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

(2)

(2)

(2)

(0)

(0)

(1)

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

0

Balance at March 31, 2011····

63,422(0)28,66329,973

Increase (decrease) in retained
earnings due to inclusionof new subsidiaries in
consolidation·························
26,398(2,759)Purchase of treasury stock····(457)

Disposal of treasury stock····Transfer to common
stock from capitalsurplus reserve ·············
Decrease of retained
earnings (Other) ············
Other net change
during the year···············
Balance at March 31, 2012····0(3,572)(7,208)766(6,442)

104,403

11,388(9,281)

2,107

2,528

109,038¥84,398

(69)

(69)

26,39826,398(2,759)

(1)

(1)

0

0

0

(0)

(0)

(0)

¥48,389¥(865) ¥132,558(29,337)

¥636

4,586

(2,759)(17,916)(6,928)

Outstanding
number ofshares ofcommonstock

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

63,422$348,741$364,679$567,356$(10,512) $1,270,264 $138,557 $(112,921)

107,581

Total
shareholders’equityDisposal of treasury stock····Transfer to common
stock from capitalsurplus reserve ·············
Decrease of retained
earnings (Other) ············
Other net change
during the year···············
Balance at March 31, 2012····0Unrealized
gain onavailable-for-salesecurities

Total
net assets$30,758 $1,326,658(840)
321,183(840)
321,183(356,941)(33,568)(33,568)

(12)

(12)

(12)

0

0

0

-

-

(0)

(0)

- (217,983)$7,738$25,636

Minority
interests

(840)

(0)

$1,026,865

Foreign
Accumulated
currency
other comtranslation prehensive
incomeadjustments

55,798(0)356,941

170,546(23,242)

55,798(33,568)
(457)

1,602

¥4,130 ¥113,951

55,798321,183

Cash dividends·················
Purchase of treasury stock····(24,844)¥(6,528) ¥(16,209) ¥(22,737)

Thousands of U.S. dollars (Note 1)

Thousands

Net income·······················
Increase (decrease) in retained
earnings due to inclusionof new subsidiaries in
consolidation·····················
Issue of new stock············(3,636)

170,546

(0)

—

(1)
(0)
29,337¥1,762 ¥116,071

4,586

(69)
107,581

Cash dividends·················

Balance at March 31, 2011····

(864)

4,586

Net income·······················

Issue of new stock ··········

46,631¥9,315Total
net assets

Net income · ····················
Purchase of treasury stock····¥(5,709)

Minority
interests$588,746(84,293)(302,276)$(10,524) $1,612,825 $(79,426) $(197,214) $(276,640)

19,491(282,785)$50,249 $1,386,434

The accompanying notes are an integral part of these statements.

Nipro Corporation Annual Report 2012 32

Consolidated Statements of Cash Flows

Nipro Corporation and its Consolidated Subsidiaries
For the years ended March 31, 2012 and 2011

Millions of yen
2012
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···································

4,586

2011
¥

2,456

Thousands of U.S. dollars(Note 1)
2012$

55,79821,581
2,652
529
84
(71)
(197)
1,969
348
972

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

262,575
32,267
6,436
1,022
(864)
(2,397)
23,957
4,234
11,826(7,491)(10,925)(1,366)
(213)
4,909
111
(1,992)
10,900
15,486(4,927)(5,472)
(450)
165
6,542
(1,767)667
19,34421,800(91,142)(132,924)(16,620)(2,592)
59,727
1,351(24,236)
132,620
188,418

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···············································(37,738)443(299)(3,253)
10(19,256)
51(49,113)(19,097)
4,805(459,156)
5,390(3,638)(39,579)
122(10,405)
1,078(14,699)(3,056)(67,919)

(624)
(588)
800
(1,636)(84,658)(126,597)
13,116(178,842)(37,182)(826,366)

Financing activities:
Net increase (decrease) in short-term loans·······································
Proceeds from long-term loans··························································
Repayment of long-term loans···························································
Proceeds from issuance of bonds·····················································
Repayment of bonds·········································································
Proceeds from issuance of common stock········································Cash dividends paid··········································································
Other, net··························································································Net cash provided by financing activities····································(3,653)63,894(33,500)
7,974(5,000)19,181(2,759)(412)
45,72523,06280,108(23,234)
19,890(10,160)—(3,041)(359)
86,266(44,446)
777,394(407,592)
97,019(60,835)
233,374(33,569)(5,012)556,333(2,287)(8,995)78,922(2,269)21,13956,188(27,826)(109,441)
960,238

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 2012

¥

9,523
79,450¥1,595
78,922$

115,866
966,663

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 has
adopted the “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial Statements”(PITF No. 18) and as a result, the accounts 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 fiveitems 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 ¥82.19=US$1, theapproximate exchange rate on March 31, 2012. These translations
should not be construed as representations that the Japanese yenamounts actually are, have been or 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 to ten years.
All accounts herein have been presented on the basis of the twelve
months ended March 31, 2012 for the Company and for consolidated
domestic subsidiaries, and December 31, 2011 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 2012 34

(f) Investment Securities(j) Income Taxes

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, are reported in the“Accumulated other comprehensive income” section of net assets.
For the year ended March 31, 2012, 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.

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.

(g) Derivatives
Derivatives are stated at fair value, with changes in fair value included
in net income or loss for the period in which they arise, except forderivatives designated as hedging instruments. Please see (i) Hedge
Accounting below.

(h) 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”.

(i) Hedge Accounting<Method of hedge accounting>
The deferral hedge accounting method is applied in principle. The
allocation method is applied to currency swap and the exceptional
accounting method is applied to interest rate swap when therelevant criteria are met.
<Hedge instrument and hedge items>(Hedge instrument)(Hedge item)
Currency swap
Foreign currency denominated loans
Interest rate swap
Interests on loans payable<Hedge policy>
The Company uses interest rate swaps to mitigate the interest raterisk involved in procuring funds and hedge items are identified on
an individual contract basis.
<Method of efficacy evaluation>
The efficacy evaluation for currency swap which meets the relevant
criteria of the allocation method and interest rate swaps whichmeets the relevant criteria of the exceptional accounting method
are left out.

35 Nipro Corporation Annual Report 2012(k) 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 reflects 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.
(Application of Accounting Standard for earnings per share)
Effective the fiscal year ended March 31, 2012, the Company has
applied Accounting Standard for Earnings Per Share (ASBJ Statement
No.2, issued on June 30, 2010), Guidance on Accounting Standard
for Earnings Per Share (ASBJ Guidance No.4, issued on June 30,2010) and Practical Solution on Accounting for Earnings Per Share(ASBJ PITF No.9 issued on June 30, 2010).
In addition, the Company has split one share of common stock
into two shares on October 1, 2011 based on the resolution at theboard of directors’ meeting held on August 27, 2011. In accordancewith this application, equity per share, earnings per share and diluted
earnings per share are calculated on the assumption that the two-forone stock split of common stock was conducted at the beginning offiscal year ended March 31, 2011.

(l) Application of Accounting Standard for Accounting
Changes and Error Corrections
Effective the fiscal year ended March 31 2012, the Company has
applied the Accounting Standard for Accounting Changes and Error
Corrections (ASBJ Statement No.24, issued on December 4, 2009)
and Guidance on Accounting Standard for Accounting Changes andError Corrections (ASBJ GuidanceNo.24, issued on December 4,2009).

3. Inventories
Inventories consisted of the following:

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

Millions of yen
2012
2011
48,114¥42,697
11,852
8,975
8,753
6,784
2,885
2,487
¥71,604¥
60,943¥¥Thousands of U.S. dollars (Note 1)
2012$
585,400
144,202
106,497
35,102$871,201

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, 2012 and 2011.
The significant components of deferred tax assets and liabilities were as follows:
Millions of yen
2012
Deferred tax assets
Operating loss carryforwards for tax purposes····························
Intercompany profits···································································
Valuation loss on inventories························································
Allowance for bonuses to employees··········································
Allowance for loss on clearance of business································
Accounts receivable····································································
Loss on impairment of fixed assets·············································
Excess of allowance for doubtful accounts over tax allowable amounts·······
Accrued pension and severance liabilities····································
Accrued enterprise taxes·····························································
Provision for loss on disaster·······················································
Unrealized loss on available-for-sale securities·····························
Other··························································································
Gross deferred tax assets··································································
Less: Valuation allowance··································································
Total deferred tax assets····································································
Deferred tax liabilities
Unrealized gain on available-for-sale securities····························
Revaluation reserve for land························································
Revaluation reserve for intangible assets·····································
Revaluation reserve for fixed assets - other·································
Other··························································································
Total deferred tax liabilities···························································Net deferred tax assets (liabilities)···························································

¥

¥

4,633
661
497
830
739
170
613
991
634
300
—
4,343
2,924
17,335(3,628)13,707

¥
¥

839
674
1,165
1,135
228
4,041
9,666

¥

Thousands of U.S. dollars (Note 1)
2012

2011
¥

¥

4,516
682
789
828
792
267
957
1,130
600
258
1,608
—
2,047
14,474(4,727)
9,747

¥
¥

7,787
795
1,323
470
143
10,518
(771)

¥

$

$

56,3698,042
6,047
10,099
8,991
2,068
7,458
12,057
7,714
3,650
—
52,84135,577
210,913(44,142)
166,771$$

10,2088,201
14,174
13,8092,774
49,166
117,605$

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

2012
40.5%
2.4
(3.3)
8.9
6.1
8.6
(3.9)
(2.0)
(2.8)
54.5

2011
40.5%
3.5
(2.5)
31.6
—
1.1
(4.9)
(3.5)
(3.6)
62.2

* Adjustment of deferred tax assets and liabilities following the change in the statutory tax rates
The “Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating
for the temporary difference expected to be eliminated after April 1, 2012) has changed
Taxation System Responding to Changes in Economic and Social Structures” and thefrom 40.5% of the previous fiscal year to 37.8% for those expected to be recovered or“Act on Special Measures for Securing Financial Resources Necessary to Implement
paid during the period from April 1, 2012 to March 31, 2015, and to 35.4% for those
Measures for Reconstruction following the Great East Japan Earthquake” were
expected to recovered or paid after April 1, 2015.
promulgated on December 2, 2011.
Following these changes, net deferred tax assets decreased ¥1,228 million (US$ 14,941
Accordingly, the statutory tax rates for calculating deferred tax assets and liabilities (onlythousand), while income taxes deferred increased ¥664 million (US$ 8,079 thousand).
Nipro Corporation Annual Report 2012 36

5. Pledged Assets
The following assets were pledged as collateral:
Millions of yen
2012
Land··································································································¥

Thousands of U.S. dollars (Note 1)
2012

2011

1,746

¥

1,523

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

9,596

7,466

Land use rights (*1)············································································

214—

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

11,556

¥

8,989

$

21,243
116,7542,604$

140,601(*1) This is included in intangible assets “other” on the balance sheet.

The above assets were pledged against the following liabilities:
Millions of yen
2012
Short term bank loans·······································································¥

Thousands of U.S. dollars (Note 1)
2012

2011

1,956

¥

1,000

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

1,586

653

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

5,526

6,038

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

¥

9,068

¥

7,691

$

23,79919,297
67,234$

110,330

6. Investment Securities
Investment securities as of March 31, 2012 and 2011 consisted of the followings:
Millions of yen
2012

Thousands of U.S. dollars (Note 1)
2012

2011

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

58,207¥39

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

87,459$708,201475

38

Sub total·····················································································¥

58,246¥87,497$

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

¥

1,374

¥

1,382

$

16,716

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

59,620¥88,879$725,392

37 Nipro Corporation Annual Report 2012

708,676

The carrying amounts and aggregate fair values of marketable securities for investments as of March 31, 2012 and 2011 were as follows:
Millions of yen
2012
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···················································································¥

69,14847
69,195¥

Cost

Thousands of U.S. dollars(Note 1)
2012
Unrealized gain
Unrealized loss¥¥

$ 841,319
572$ 841,891

$
$

¥
¥

23,811—
23,811¥¥

12,898812,906$ 156,929
97$ 157,026¥¥

69,14947
69,196¥¥

18,881—
18,881

¥
¥

571
9
580

58,20739
58,246

Fair Value$ 708,201475$ 708,676

Millions of yen
2011
Unrealized gain
Unrealized loss

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

1,957
—
1,957

Fair Value

Fair Value¥¥

87,45938
87,497

Proceeds from sales of securities and gross realized gain or loss on those sales for the years ended March 31, 2012 and 2011 were as follows:
Millions of yen
2012
Proceeds·································································································
Gains on sales·························································································
Losses on sales·······················································································* Evaluation of investment securities
For the year ended March 31, 2011, the Company recognizeddevaluation of ¥231million on available-for-sale securities. The
Compnay recognizes devaluation losses on investment securities
whose values have declined by at least 50% of their book value unless

¥

10
—
—

2011
¥
4,805
836
0

Thousands of U.S. dollars (Note 1)
2012
$
122
—
—

on a reasonable 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, 2012 and 2011 were as follows:

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

Millions of yen
2012
2011
¥
772
¥
942
736
815
¥
36
¥
127

Thousands of U.S. dollars (Note 1)
2012
$
9,393
8,955
$
438

Millions of yen

Thousands of U.S. dollars (Note 1)
2012
$
633
73
$
706

2012
Payments due within one year·································································
Payments due after one year···································································
Total·································································································

¥
¥

52
6
58

2011
¥
146
68
¥
214

Lease payments under such leases for the years ended March 31, 2012 and 2011 were ¥160 million (US$1,947 thousand) and ¥219 million,
respectively.
Nipro Corporation Annual Report 2012 38

8. Financial Instruments(1) Circumstances on financial instruments(a) Policy for financial instruments
The Company and its consolidated subsidiaries manage thetemporary surplus funds by deposit with banks that have a high levelof safety.
The Company and its consolidated subsidiaries raise funds forbusiness operation with mainly bank loans and bonds considering
their business investment and cash planning.
(b) Details and risk of financial instruments and its risk
management
Receivable such as trade notes and accounts receivable are exposed
to customer’s credit risk. Receivables denominated in foreign
currencies are exposed to the market risk of fluctuation in foreign
currency exchange rates.
In order to reduce the customer’s risk, the Company monitors thedues and balances by customer in accordance with the Company’s
regulations of credit administration.
Investments securities are exposed to the market fluctuation risk, butmainly consist of equity of the companies which conduct businesswith the Company. The Company periodically reviews the market priceof such securities.
Payables such as trade notes, accounts payable and accounts
payable other are due within 1 year. Payables denominated in foreign

currency are exposed to the risk of fluctuation in foreign currency
exchange rates.
Short-term loans payable are mainly borrowed to raise operating
capital and long-term loans payable are mainly borrowed to makecapital expenditures. A part of long-term loans with the floatinginterest rate has the risk of interest rate fluctuation, but the Company
and its consolidated subsidiaries use interest rate swap to solidify theinterest rate. For some of the loans denominated in foreign currency,
the Company and its consolidated subsidiaries use currency swap tohedge the currency fluctuation risk.
Bonds and commercial papers are mainly issued to raise the funds forbonds retirement.
Lease obligations are mainly for the capital expenditures, free frominterest-rate risk because the interest rate is fixed.
Payables, loans and bonds are exposed the liquidity risk, but theCompany and its consolidated subsidiaries manage the risk by
establishing cash planning.
(c) Supplemental information on fair values of financial
instruments
Fair values of financial instruments include values based on market
price and reasonably estimated values when market price is notavailable. Because variable factors are counted in the estimation, theestimated values may vary by adopting different assumptions.

(2) Fair values of financial instruments
The book values, fair values and the differences between them as of March 31, 2011 and 2012 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 2012

Book value¥
95,738Millions of yen
2012
Fair value¥
95,738Difference
—
¥

¥
¥

68,281
58,246222,265
37,721¥¥

68,281
58,246222,265
37,721

¥
¥

—
—
—
—

¥

124,132
12,367
189,380
1,341
364,941¥

124,132
12,367
189,1651,289
364,674

¥

—
—
215
52
267

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

Thousands of U.S. dollars (Note 1)
2012Book value
Fair value
Difference—$ 1,164,839$ 1,164,839$
830,770
708,676$ 2,704,285$ 458,948

830,770
708,676$ 2,704,285$ 458,948

1,510,305
150,4682,304,173
16,316$ 4,440,210

1,510,305
150,468
2,301,557
15,683$ 4,436,961

$
$

—
—
—
—

$

—
—
2,616
633
3,249

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

Remark 1 Methods used to calculate fair values of financial instruments and the details of securities<Assets>• Cash and cash equivalents, time deposits and trade notes and• Other notes and account payableaccounts receivable
Because the settlement periods of the above items are short andCash and cash equivalents and trade notes and accounts receivable
their fair values are almost the same as their book values, theare stated at the relevant book value because the settlement periods
relevant book values are used.
are short and the fair values are almost the same as the book value.
• Long-term debt
• Investments securities
The fair value of long-term debt is calculated by applying a discountEquity securities are stated at market value. See Note 6. “Investment
rate to the total of principal and interest. The discount rate is based
securities” for the detailed information by classification.
on the assumed interest rate if a similar new loan was entered into.
•Lease
obligation<Liabilities>
The fair value of lease obligations is calculated by applying a• Trade notes and accounts payable  and short-term bank loans anddiscount rate to the total of principal and interest. The discount ratecurrent portion of long-term debt and commercial paper
is based on the assumed interest rate if a current lease transaction
Because the settlement periods of the above items are short andwas renewed.
their fair values are almost the same as their book values, therelevant book values are used.

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

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

Millions of yen
2012
13,583¥2011
18,068

Thousands of U.S. dollars (Note 1)
2012$
165,263

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 above.
Remark 3 Planned redemption amounts after the balance sheet date for monetary receivables with maturity dates are as follows:
Millions of yen
2012
2011
Within 1 year
Within 1 year¥
95,738¥
81,116
68,28160,823

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

Thousands of U.S. dollars (Note 1)
2012
Within 1 year$
1,164,839
830,770

Remark 4 Planned repayment amounts after the balance sheet date for monetary payables with maturity dates
Planned repayment amounts after the balance sheet date for monetary payables with maturity dates at March 31, 2012 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································································¥

37,721¥

124,132
12,367—427
174,647

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································································$

458,948

1,510,305
150,468—
5,195$ 2,124,916

Millions of yen
2012
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
—
¥
—
¥
—
¥
—
¥

¥

—
—
32,961402
33,363¥——51,004409
51,413¥——
46,173
88
46,261¥——40,86315
40,878

Thousands of U.S. dollars (Note 1)
2012
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
—
$
—
$
—
$
—
$

$

—
—
401,035
4,891
405,926$——
620,561
4,977
625,538$——
561,784
1,071
562,855$——
497,177
182
497,359Over 5 years
¥

—

¥

—
—
18,379—18,379Over 5 years
$

—

$

—
—
223,616—
223,616

Nipro Corporation Annual Report 2012 40

9. Derivatives
The Company and its consolidated subsidiaries had the following derivatives contracts outstanding at March 31, 2012.
1. Derivatives not designated as hedging instruments
N/A
2. Derivatives designated as hedging instruments
Millions of yen
2012
Contract amountOver 1 year out ofcontract amount

Fair
value

long-term loans

¥

3,561

¥

2,864

(*1)

long-term loans

¥

411

¥

339

(*1)

Method of hedge accounting

Type of Derivatives

Principal Hedge item

Exceptional accounting method ofinterest rate swap
Allocation method of
forward foreign exchange contract, etc.

Interest rate swap
Currency swap

Thousands of U.S. dollars (Note 1)
2012
1 year out of
Amount of contract Over
contract amount

Fair
value

long-term loans$

43,326$

34,846(*1)

long-term loans

$

5,001

$

4,125

(*1)

Method of hedge accounting

Type of Derivatives

Principal Hedge item

Exceptional accounting method ofinterest rate swap
Allocation method of
forward foreign exchange contract, etc.

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

10. Short-Term Loans and Long-Term Debt
Short-term loans comprised overdrafts and promissory notes.
The weighted-average interest rates of short-term bank loans for the years ended March 31, 2012 and 2011 was 1.067% and 0.682%, respectively.
The weighted-average interest rate of commercial paper for the years ended March 31, 2012 and 2011 were 0.113% and 0.118% respectively.
Long-term debt comprised the following:
Millions of yen
2012
1.51% unsecured bonds due 2012··························································
1.37% unsecured bonds due 2014··························································
1.37% unsecured bonds due 2013··························································
2.04% unsecured bonds due 2018··························································
0.877% unsecured bonds due 2016························································
Zero coupon convertible bonds due 2015················································
0.64% unsecured bonds due 2016 ·························································
Long-term bank loans due through 2021, with weighted-averageinterest rate of 1.137% for the year ended March 31, 2012, and of
1.217% for the year ended March 31, 2011.············································
Less current portion of long-term debt······················································
Total··································································································In February 2009, the Company issued ¥5,000 million (US$60,835
thousand) of 1.51% privately-placed bonds due 2012.
In September 2009, the Company issued ¥3,000 million(US$36,501 thousand) of 1.37% privately-placed bonds due 2014.
In March 2008, the Company issued ¥10,000 million (US$121,669
thousand) of 1.37% unsecured bonds due 2013.
In March 2008, the Company issued ¥10,000 million (US$121,669
thousand) of 2.04% unsecured bonds due 2018.
In March 2011, the Company issued ¥20,000 million (US$243,339
thousand) of 0.877% unsecured bonds due 2016.

41 Nipro Corporation Annual Report 2012

¥

¥

—
3,000
10,00010,00020,00015,0001,000

181,254(50,874)
189,380

¥

¥

2011
5,000
3,000
10,00010,00020,00015,000—149,836(34,286)
178,550

Thousands of U.S. dollars(Note 1)
2012$—
36,501
121,669
121,669
243,339
182,504
12,167$2,205,304(618,980)
2,304,173

In March 2010, the Company issued ¥15,000 million (US$182,504
thousand) of zero coupon convertible bonds due 2015.
In April 2011, Tohoku Nipro Pharmaceutical Corporation issued¥1,000 million (US$12,167 thousand) of 0.64% privately-placedbonds due 2016.

The aggregate annual maturities of long-term debt outstanding at March 31, 2012 are as follows:
Millions of yen
2012¥
50,87432,96151,004105,415¥240,2542012········································································································
2013········································································································
2014········································································································
2015 and thereafter··················································································
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.

Thousands of U.S. dollars (Note 1)
2012$
618,980
401,034
620,562
1,282,577$
2,923,153

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.

11. Accrued Pension and Severance Liabilities
The Company and certain consolidated subsidiaries have defined benefit pension plans and unfunded retirement benefit plans, and defined
contribution pension plan for employees. 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, 2012 and 2011.

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

Thousands of U.S. dollars (Note 1)
2012$(106,704)
74,717(31,987)
8,140
(110)
(23,957)
231$(24,188)

Millions of yen
2012
2011
(8,770)¥(8,799)6,141
6,182(2,629)(2,617)
669
1,039
(9)
(12)
(1,969)(1,590)19
26(1,988)¥(1,616)¥¥The breakdown of net pension and severance costs for the years ended March 31, 2012 and 2011 were as follows:

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

Millions of yen
2012
2011
614
¥
698
152
178
(102)
(117)
264
97
(3)
(3)
264
114
1,189
¥
967

¥

¥

Thousands of U.S. dollars (Note 1)
2012
$
7,470
1,849
(1,241)
3,212
(37)
3,212
$
14,465The assumptions used in the accounting for the above benefit plans were as follows:
Discount rate·························································································
Expected rate of return on plan assets··················································
Amortization period of past service obligation········································
Amortization period of actuarial differences············································

2012
Primarily 1.8%
Primarily 1.5%
Primarily 5 years
Primarily 5 years

2011
Primarily 1.8%
Primarily 1.5%
Primarily 5 years
Primarily 5 years

12. Commitments and Contingent Liabilities
The Company and its consolidated subsidiaries had the following commitments and contingent liabilities:
Millions of yen
2012
Export drafts discounted·······································································
Trade notes receivable discounted·························································
Total································································································

¥
¥

2011
9
10
19

¥
¥

78
30
108

Thousands of U.S. dollars (Note 1)
2012
$
110
122
$
232
Nipro Corporation Annual Report 2012 42

13. 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 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’ meeting.
The Company’s legal reserve, which is included in retained
earnings, amounted to ¥1,273 million (US$15,489 thousand) as ofMarch 31,2012, and its additional paid-in capital, which is included incapital surplus, amounted to ¥635 million (US$ 7,726 thousand) as ofMarch 31, 2012.

14. 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 directors
in deciding how to allocate management resources and in assessing
performance.
The Company currently operates its business on a stand-alone
basis with the divisional organization and evaluates the performanceof sales and manufacture 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 treats with
(Medical business, Pharmaceutical business and 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 2012

Pharmaceutical business
Mainly, domestic subsidiaries sell and manufacture injectable drugs,
oral drugs and products by contract manufacturing like injectablepreparations in kit form (kit preparations).
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.

Business segment information for the years ended March 31, 2012 and 2011 was as follows:
Millions of yen
2012
Medical
Net sales: Outside··························· ¥ 145,082
Intersegment··················
1,851
Total·······························
146,933
Operating income·····························
17,078
Identifiable assets····························· ¥ 219,306
Other items
Depreciation and amortization·········· ¥ 12,353
Amortization of goodwill····················
2,403
Investment to companies accounted
for by the equity method·················—
Capital expenditures·························
23,944

Medical
Net sales: Outside··························· $1,765,203
Intersegment··················
22,521
Total······························· 1,787,724
Operating income·····························
207,787
Identifiable assets····························· $2,668,281
Other items
Depreciation and amortization·········· $ 150,298
Amortization of goodwill····················
29,237
Investment to companies accounted
for by the equity method·················—
Capital expenditures·························
291,325

Reportable Segment
Pharma­Materials
ceutical¥ 40,079 ¥ 26,590
19,4853,534
59,56430,124
2,986
2,408¥ 119,454 ¥ 19,590¥ 211,751
24,870236,621
22,472¥ 358,350

¥

¥

¥

¥

8,037
150

¥

—
13,789

338
99
—
1,104

20,7282,652¥ 212,013
24,915236,928
22,702¥ 362,942—(24,915)(24,915)(6,877)¥ 136,745

Consolidated
financialstatements¥ 212,013—
212,013
15,825¥ 499,687

¥

¥

¥

Other
(*1)

Total
¥

Total

262
45
307
230
4,592
48
—

—
38,837——

20,776
2,652

97,786
1,825$—
167,770

4,112
1,205

$ 252,196
32,267—
13,432—472,527$¥—
38,837

Thousands of U.S. dollars (Note 1)
2012
Reportable Segment
Other
Total
Pharma­(*1)
Materials
Total
ceutical$ 487,638 $ 323,519 $2,576,360 $
3,187 $2,579,547
237,073
42,998302,592548
303,140
724,711366,517
2,878,952
3,735
2,882,687
36,33029,298273,4152,798
276,213$1,453,388 $ 238,350 $4,360,019 $ 55,871 $4,415,890$

Adjustment
(*2)

584
—

$ 252,780
32,267———472,527

805
—
1,679
688

Adjustment
(*2)
$

—
(303,140)(303,140)(83,672)$1,663,767$

21,581
2,652
1,679
39,525

Consolidated
financialstatements$2,579,547—
2,579,547
192,541$6,079,657

9,795
—

$ 262,575
32,267

20,428
8,371

20,428
480,898

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
Pharma­Materials
ceutical¥ 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

Total

20,463
1,744—
21,791¥ 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
(*1)
¥

Total

417
44
461
88
4,639
55
—
—
—

20,518
1,744—
21,791

Adjustment
(*2)

¥

726
—
1,763
1,532

21,244
1,744
1,763
23,323(*1) “Other” is the business segment which is not included in the reportable segment and consists of real estate income and sales by headquarters.
(*2) Adjustment is as follows:• Adjustment for the operating income at March 31, 2012 and 2011 include ¥110 million (US$1,338 thousand) and ¥333 million of  elimination of inter-segment transactionand ¥(6,987) million (US$(85,010) thousand) and ¥(5,992) million of corporate cost, respectively. Corporate cost consists primarily of sales, general and administrative
expenses and research and development cost which do not belong to the reportable segment.
• Adjustment for Identifiable assets at March 31, 2012 and 2011 include ¥(54,853) million (US$(667,393) thousand) and ¥(57,266) million of elimination of inter-segment
transaction and ¥191,598 million (US$2,331,160 thousand) and ¥227,520 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 reportable segment.
• Adjustment for depreciation and amortization at March 31, 2012 and 2011 are for corporate assets. Depreciation and amortization and Capital expenditures include
long-term prepaid expenses.
• Adjustment for capital expenditures is increase in corporate assets.

Nipro Corporation Annual Report 2012 44

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

Millions of yen

2012

2011

Reportable Segment
Medical Pharmacetical Materials

Total

¥ 529

—

¥ 529

359

11,895

Other

Total

¥

—

¥ 529

—

11,895

Reportable Segment
Medical Pharmacetical Materials

Total

¥

¥

Other

Total

¥

¥

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

¥

—

¥

39

¥

—

¥

26

65

—

65

Unamortized balance of
goodwill·····················

11,539

(3)

7,287

198

349

7,834

—

7,834

Thousands of U.S. dollars (Note 1)
2012
Reportable Segment
Medical Pharmacetical Materials

Total$ 6,436$ 6,436

Other

Total

$

$ 6,436

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

$

—

$

—

—

Unamortized balance of
goodwill·····················

140,394(36)

4,368 144,726— 144,726

Net sales and Property, plant and equipment by geographic area were as follows:
Millions of yen

Millions of yen

2012
Net sales·······················

2011

Japan

America

Europe

Asia

Total

Japan

America

Europe

Asia

Total

¥ 129,237¥ 40,519¥ 23,140¥ 19,117¥ 212,013¥ 124,905¥

37,121¥ 20,707¥ 13,210¥ 195,943

102,275

8,392

3,311

31,701

145,679

105,022

5,779

141

17,564

128,506

Property, plant andequipment··················

Thousands of U.S. dollars (Note 1)
2012
Net sales·······················

Japan

America

Europe$1,572,417$ 492,992$ 281,543

1,244,373

102,105

40,285

Asia

Total

$ 232,595 $ 2,579,547

Property, plant andequipment··················

45 Nipro Corporation Annual Report 2012

385,704

1,772,467

15. Selling, General and Administrative Expenses
Significant components of selling, general and administrative expenses for the years ended March 31, 2012 and 2011 are as follows:
Thousands of U.S. dollars (Note 1)

Millions of yen
2012
Salaries····································································································¥

11,372¥

5,143

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

2012

2011
10,358$138,362
62,575

4,685

16. Reseach and Development Expenses
Research and development expenses for the years ended March 31, 2012 and 2011 were ¥5,957 million (US$72,478 thousand) and ¥4,977
million, respectively.

17. 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
2012

2012

2011

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

¥

3,226
6,147

¥

2,405
8,217

$

39,251
74,790

Nipro Corporation Annual Report 2012 46

Report of Independent Auditors

47 Nipro Corporation Annual Report 2012

Corporate Information (As of March 31, 2012)

Date of Establishment
July 8, 1954

Principal 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/
Tokyo Office
4-3-4 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan
Telephone : +81-3-5684-5611
Facsimile : +81-3-5684-5610
Number of Employees
Parent Company·················································································
Consolidated subsidiaries····································································

2,367
12,199Total····································································································

14,566

Common Stock
Authorized
IssuedOutstanding
Number of Shareholders

Sanri Kosan Co., Ltd.····································
Nippon Electric Glass Co., Ltd.······················
Japan Trustee Services Bank, Ltd.·················
Trust & Custody Services Bank, Ltd.··············The Master Trust Bank of Japan, Ltd.············
Minoru Sano··················································
Resona Bank Limited····································
National Mutual Insurance Federationof Agricultural Cooperatives·······················
Mizuho Corporate Bank, Ltd.·························
Nipro employees’ stock ownershipassociations················································
Total······························································

Number of
Shares Held(in thousands)
36,80914,31014,012
3,833
3,832
3,820
2,760

Percentage ofTotal Shares in
Issue (%)
21.47
8.35
8.17
2.24
2.23
2.23
1.61

2,155
1,565

1.26
0.91

1,260
84,3600.74
49.20

Stock Price Range (Tokyo Stock Exchange)
400,000,000 shares
171,459,479 shares
170,545,867 shares
32,465

Stock Listings
Tokyo Stock Exchange, Osaka Securities Exchange
Ticker Code: 8086
Transfer Agent
Mizuho Trust & Banking Co., Ltd., Osaka Branch,
Stock Transfer Agency Dpt.
2-11-16 Sonezaki, Kita-ku, Osaka 530-0057, Japan

(Yen)

1,200
1,100
1,000
900
800
700
600
500

12

3
2010

6

9

12

3
2011

6

9

12

3
2012

Major Subsidiaries (As of June 30, 2012 )Area
Domestic

CountryJapan

Overseas

Thailand
China

Singapore
India

BangladeshIndonesia
UAE
BrazilU.S.A.

Belgium
FranceGermany
Switzerland

Name
Nipro Medical Industries Co.,Ltd.
Nipro Pharma Corporation
Zensei Pharmaceutical Industries Co.,Ltd.
Nipro (Thailand) Corporation Limited
Nipro Sales (Thailand) Co.,Ltd.
Nipro (Shanghai) Co.,Ltd.
Nipro Trading (Shanghai) Co., Ltd.
Chengdu Pingyuan Nipro Pharmaceutical Packaging Co., Ltd.
Jilin Nipro Jiaheng Pharmaceutical Packaging Co., Ltd.
Anyang Nipro Changda Pharmaceutical Packaging Co., Ltd.
Nipro Medical (Hehei) Co., Ltd.
Shanghai Nissho Vacuum Flask Refill Co.,Ltd.
Nipro Asia Pte Ltd.
Nipro India Corporation Pvt. Ltd.
Nipro Glass India Pvt. Ltd.
Nipro Tube Glass Limited
Nipro JMI Company Ltd.
Nipro JMI Pharma Ltd.
P.T. Nipro Indonesia JAYA
Nipro Middle East FZE
Nipro Medical Ltda.
Nipro Medical Corporation
Nipro Diagnostics, Inc.
Nipro Glass Americas Corporation
Nipro Europe N.V.
Nipro Glass Belgium N.V.
Nipro Glass France S.A.S.
Nipro Glass Germany AG
Nipro Sterile Glass Germany AG
Nipro Pharma Glass AG

Principal business
Manufacturing and Marketing of medical equipment
Manufacturing and Marketing of pharmaceuticals
Manufacturing and Marketing of pharmaceuticals
Manufacturing and Marketing of medical equipment
Marketing of medical equipment
Manufacturing and Marketing of medical equipment
Marketing of medical equipment
Manufacturing and Marketing of glass products
Manufacturing and Marketing of glass products
Manufacturing and Marketing of glass products
Manufacturing and Marketing of medical equipment
Marketing of glass products
Marketing of medical equipment
Manufacturing and Marketing of medical equipment
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical equipment
Manufacturing and Marketing of pharmaceuticals
Manufacturing and Marketing of medical equipment and medical glass products
Marketing of medical equipment
Manufacturing and Marketing of medical equipment
Marketing of medical equipment
Manufacturing and Marketing of diabetes-related products
Manufacturing and Marketing of medical glass products
Marketing of medical equipment
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Manufacturing and Marketing of medical glass products
Business Management

Nipro Corporation Annual Report 2012 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