Annual Report2001 - Nichicontype aluminum electrolytic capacitors; steady growth in demand is...

NICHICON Strives for New Heights.

2001Annual ReportYear Ended March 31, 2001

2

Profile

Nichicon specializes in the development, manufacture and marketing of capacitors, core components for electronic devices. Our name “Nichicon” is a combination of “Nichi” and “con.” “Nichi” is derived from Nippon or Japan which is written with two Chinese characters 日本 , and “con” is an abbreviation of ‘condenser,’ as capacitors are called in Japan. Established in 1950 at Kusatsu city, Shiga prefecture, as a manufacturer of capacitors for power utilities, Nichicon’s growth paralleled the progress and expansion of Japan’s electronics industry. Nichicon subsequently diversified into capacitors for four major applications: electronics; circuit units; electric apparatus and electric utilities; and capacitor-related and other products. As business grew, Nichicon expanded its manufacturing and marketing network to meet the demands of a growing business, and today has a network of 8 manufacturing facilities, 15 manufacturing subsidiaries and 16 sales offices in Japan. The overseas network embraces 5 marketing subsidiaries and 5 manufacturing and marketing subsidiaries. Now, Nichicon is strategically positioned to expand market share in the rapidly growing IT devices market. We are also marshalling resources to strengthen our position in other growth markets, including digital household appliances and automobiles.

In fiscal 2000 and 2001, Nichicon plans to invest a total of ¥46,848 million to

achieve two goals: increase production of aluminum electrode foil, a key

material in aluminum electrolytic capacitors; and quickly ramp up production

of tantalum electrolytic capacitors to meet burgeoning demand. Following

these investments, Nichicon is now cutting costs and enhancing quality to

become the number-one supplier in its chosen markets.

This year’s cover symbolizes this desire to tackle greater challenges, just as

a pole vaulter constantly raises the bar.

Cover :Profile

Financial Highlights

Main Focus Field

To Our Shareholders

Review of Operations

Capacitors for Electronics

Circuit Products

Capacitors for Electric Apparatus and Power Utilities

Others

News & Topics

Financial Section

Financial Review

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

Report of Independent Certified Public Accountants

Consolidated Subsidiaries

Corporate Data

Investor Information

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NICHICON Strives for New Heights.

Forward Looking StatementsProjections of operating results and changes in the operating environment are based on information available to management at the time this report was prepared. As such, these projections entail risks and uncertainties. Readers should be aware that actual results and events may differ substantially from these projections.

Nichi-hon

3

¥ 121,20110,28011,8986,703

25,92913,026

174,901119,603

¥ 80.0613.00

1,453.78

68.4%5.7

¥ 103,12311,54412,3905,377

10,5817,923

142,582111,056

¥ 63.9212.00

1,319.82

77.9%4.9

¥ 105,77415,48916,3377,8249,9207,664

143,608106,861

¥ 93.0114.00

1,270.35

74.4%7.6

¥ 94,34912,48614,9097,4909,1737,839

134,090100,067

¥ 89.0512.00

1,189.62

74.6%7.7

$ 978,22282,97796,03454,107

209,274105,133

1,411,634965,316

$ 0.650.10

11.73

68.4%5.7

2001

¥ 106,2468,0325,8022,927

20,91910,092

153,748114,626

¥ 34.8912.00

1,367.48

74.6%2.6

2000 1999 1998 1997 2001

U.S. dollarsYen

Financial HighlightsMillions of yen

Thousands of U.S. dollars

For the year :Net salesOperating incomeIncome before income taxes and minority interestNet incomeCapital expendituresDepreciation and amortization

At year-end :Total assetsShareholders’ equity

Per share of common stock :Net income (yen)Cash dividends (yen)Shareholders’ equity (yen)

Shareholders’ equity ratioRatio of net income to shareholders’ equity

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIES

Notes: 1. The U.S.dollar amounts are provided solely for convenience at the rate of ¥123.90 to U.S. $1, the approximate exchange rate at March 31, 2001. 2. Certain reclassifications of previously reported amounts have been made to conform with current classifications.

Years ended March 31

Net Sales (Millions of Yen)

Net Income (Millions of Yen)

Total Assets (Millions of Yen)

Operating Income (Millions of Yen)

Capital Expenditures (Millions of Yen)

Total Shareholders’ Equity (Millions of Yen)

＞＞�

120,000

100,000

80,000

60,000

40,000

20,000

0

8,000

6,000

4,000

2,000

0

180,000

150,000

120,000

90,000

60,000

30,000

0

16,000

12,000

8,000

4,000

0

30,000

25,000

20,000

15,000

10,000

5,000

0

120,000

100,000

80,000

60,000

40,000

20,000

02001/32000/31999/31998/31997/3 2001/32000/31999/31998/31997/3 2001/32000/31999/31998/31997/3

2001/32000/31999/31998/31997/32001/32000/31999/31998/31997/32001/32000/31999/31998/31997/3

94,349

105,774 103,123106,246

121,2017,490

7,824

5,377

2,927

6,703

134,090143,608142,582

153,748

174,901

12,486

15,489

11,544

8,032

10,280

9,173 9,920 10,581

20,919

25,929 100,067106,861

111,056114,626119,603

4

Main Focus Field

Household Appliances (including inverter modules) The use of inverters is rising rapidly as a means to reduce power consumption in home appliances. A type of power supply, inverters are capable of controlling motor speeds automatically with extreme precision. Power consumption and operating characteristics are both improved as a result. It is no wonder, then, that inverters are increasingly being used in room air conditioners, refrigerators, washing machines and other household appliances.*

Aluminum electrolytic capacitors, a core Nichicon product, are vital to the operation of inverters. To serve this expanding market, Nichicon is placing considerable emphasis on large capacitors of this type designed for medium and high voltages. In addition, capital investments at the Ohmachi and Tomita factories allow Nichicon to meet 90% of its aluminum electrode foil demand with internal production. With this highly integrated production system, the company is positioned to raise the reliability and cost competitiveness of its components even more.

* In an air conditioner, an inverter can cut power consumption by about 30% while also reducing vibrations and noise, compared with conventional mode.

Digital Household Appliances Having advanced from the analog to digital domain, household appliances are now said to be entering the third generation: networking based on digital technology. There is no shortage of evidence. Production levels of digital TVs, DVD* players, digital still cameras, digital video camcorders and similar devices are climbing steadily.

Nichicon is targeting the resulting opportunities by supplying compact large capacitance aluminum electrolytic capacitors and tantalum electrolytic capacitors designed for high-density mounting.

Prospects are especially attractive for chip type tantalum electrolytic capacitors and chip type aluminum electrolytic capacitors; steady growth in demand is projected. Nichicon has added production capacity to be fully prepared to grow with this demand, and technicians are working hard on the development of new products.

*DVD (Digital Versatile Disc): Optical disc with large memory capacity

＞＞�

Aluminum Electrolytic Capacitors for Inverters

Chip Type Aluminum Electrolytic Capacitors (Upper left)Chip Type Tantalum Electrolytic Capacitors (Lower right)

5

Information & Communications Equipment The IT revolution has been compared in magnitude to the invention of typography. Amid this momentous change, the performance and functions of communications equipment have been advancing at a remarkable pace. The number of capacitors per device is climbing as a result, creating a persistent supply shortage.

In the PC market, growth is projected to slow in 2001. However, estimates still call for a 10% expansion, a figure well above most other industries. Demand for mobile phones is also expected to grow. The appearance of next-generation models in the fall of 2001 will probably spark much replacement demand as users trade up.

Nichicon is supplying these markets with large volumes of high-performance components. One area of strength is solid organic polymer aluminum electrolytic capacitors and solid organic polymer tantalum electrolytic capacitors, which are uniquely suited for high-speed digital signal processing (high frequency) in information and communications devices. At the same time, Nichicon is becoming more cost competitive and taking steps to better adapt to changing market needs. The outlook is promising. Nichicon estimates that information and communications equipment will rise from 30% to about 40% of total sales over the next three years.

Automotive Related Devices Two trends of note in the automobile industry are the rising use of car electronics and progress in the development of hybrid and other next-generation vehicles. For capacitors, these events are causing higher demand for designs that are smaller yet offer higher capacitance and longer service lives.

During the past fiscal year, Nichicon made headlines by developing an aluminum electrolytic capacitor capable of withstanding temperatures of up to 150˚C, an industry first. This is welcome news to auto manufacturers as more electrical devices are installed in the engine compartment. Programs for developing Intelligent Transport Systems (ITS) and driving control systems based on information and communications technologies are also underway. In a few more years, these capacitors may also be found in electric cars. Nichicon plans to continue research in these areas, including electric double-layer capacitors, with the aim of capturing a greater share of the automotive capacitor market.

2001 /3

2000 /3

1999 /3

26%

26%

27%

8%

28%

12%

8%

8%9%

6%

8%

8%

24%

27%

10%

10%

12%

10%

9%

9%

15%

Sales by Application

Audio-VisualAutomotiveTele CommunicationsPower SupplyOAHousehold AppliancesOthers

Solid Organic Polymer Tantalum Electrolytic Capacitors

Aluminum Electrolytic Capacitors for Extremely High-Temperature (150˚C) Applications

6

To Our Shareholders

�

�

� Our operating environment was quite different in the first and second halves of fiscal 2001, the year ended March 31, 2001. During the first six months, strength in the U.S. and Southeast Asia along with growing global demand for information and communications products kept Japan’s economy on a recovery footing. In the remainder of the fiscal year, however, the U.S. economy turned downward. In Japan, deflationary forces increased as stock prices and consumer spending both fell. Furthermore, the effects of the softening U.S. economy extended beyond Japan, causing a slump in economies worldwide.

Amid this challenging environment, we focused on the development, manufacture and sale of a variety of products that draw on our unique strengths. These products targeted our core information and communications markets as well as such promising fields as digital household appliances, inverters and automotive components. We also concentrated on raising efficiency and cutting costs throughout the entire Nichicon Group. As we did so, we implemented the largest capital expenditure program in our history. Collectively, these measures gave us an even more powerful operating base.

Due to these factors, as well as the actions we have taken since fiscal 1999, consolidated net sales increased 14.1% to ¥121,201 million and net income increased 129.1% to ¥6,703 million.

In fiscal 2000, I stated that Nichicon was on the verge of a period of growth. I am therefore extremely pleased that we were able to fulfill this projection in the past year by posting increases in sales and earnings.

Net sales up 14.1%. Net income up 129.1%.

Improvements in operations lead to record-high cash-based earnings.

In fiscal 2001, we conducted ¥25,929 million of capital expenditures, all of which were funded internally. Capital expenditures in prior years were also substantial, totaling ¥10,581 million in fiscal 1999 and ¥20,919 million in fiscal 2000. Our primary objective was quite straightforward: enhance our ability to develop and efficiently manufacture capacitors for the electronic devices needed to meet growing demand for information and communications products. As part of this drive, we established two new manufacturing subsidiaries.

＞＞�

NICHICON CORPORATIONPresident & C.E.O.

Ippei Takeda

Achievements of current Term＞＞�

7

NICHICON (FUKUI) CORPORATION is mainly responsible for manufacturing solid organic polymer aluminum electrolytic capacitors. NICHICON (SHIGA) CORPORATION specializes in the manufacture of tantalum electrolytic capacitors. In all, these initiatives required investments totaling ¥23,714 million. We also invested ¥1,524 million to bolster our research and production facilities for circuit products used in information and communications products and in amusement products.

Having conducted ¥57,429 million in capital expenditures over the past three years, we have largely completed the steps needed to position Nichicon as a global winner in the market for capacitors used in electronic devices. The benefits are huge. In our core aluminum electrolytic capacitor business, we can now meet more than 90% of our aluminum electrode foil requirements internally, thereby cutting costs, improving quality and shortening delivery times. Thanks to this progress, we are now building on our solid lead in the world market for aluminum electrolytic capacitors. One more highlight of the year was our steady headway in developing high-end capacitors into a second core business. In particular, we are focusing on tantalum electrolytic capacitors as well as on solid organic polymer aluminum electrolytic capacitors and solid organic polymer tantalum electrolytic capacitors all categories where demand is growing.

In fiscal 2000, we added ¥3,279 million to our reserve for retirement benefits in anticipation of an increase in these liabilities. We took another important step in fiscal 2001, charging the entire additional retirement benefit expense of

¥3,178 million resulting from the reduction from 3.5% to 2.8% in the discount rate used to calculate future retirement benefit payments. Falling interest rates in Japan prompted this revision.

In this manner, Nichicon has made great strides in recent years in both improving its manufacturing capabilities and financial soundness. Our actions have led to increases in such important non-cash expenses as depreciation and reserves for retirement benefits, which are recorded as expenses on the income statement but require no cash outlays. Investors should therefore focus on our cash-based earnings. While net income remains below the level we achieved in fiscal 1998, our cash flows during the past three years clearly demonstrate the big improvements we have made in our operations.

EBITDA, which is earnings before interest, taxes, depreciation and amortization, is an accurate indicator of cash-based earnings at a company like ours that makes substantial investments for future growth. Our EBITDA in fiscal 2001 surpassed the ¥24,069 million posted in fiscal 1998 to reach an all-time high of ¥24,937 million. If provisions for retirement benefits, another large component of non-cash expenses alongside depreciation, are added in, the new EBITDA figure becomes ¥27,817 million, well above fiscal 1998’s ¥24,233 million. This information is presented in more detail in the graphs above.

（¥ million）�

¥ 7,490 14,909

937,839

22,841

256

¥ 23,097

¥ 5,90010,200

2016,00026,220

0

¥ 26,220

¥ 7,82416,337

687,664

24,069

164

¥ 24,233

¥ 5,37712,390

337,923

20,346

545

¥ 20,891

¥ 2,9275,802

1910,09215,913

3,031

¥ 18,944

¥ 6,70311,898

1313,02624,937

2,880

¥ 27,817

2000/31999/31998/31997/3 2002/32001/3

Net income

Income before income taxes

Interest expense ＊Depreciation and amortization

EBITDA(＊Total)

Provisions for retirement benefit reserve

Total cash-based earnings

�

＊�

�

＊�

�

(Forecast)

（¥ million）�

¥ 9,173 ¥ 17,000¥ 9,920 ¥ 10,581 ¥ 20,919¥ 25,929

2000/31999/31998/31997/3 2002/32001/3

Capital Expenditures

(Planned)

■Cash-based earnings is the sum of EBITDA and provisions for the reserve for retirement benefits.

■Capital expenditure trends （¥ million）�

2001/3 2002/32000/31999/31998/31997/3

30,000

25,000

20,000

15,000

10,000

5,000

0

23,097

9,173 9,920

24,233

20,891

10,581

18,944

20,919

27,81725,929 26,220

17,000

2001/3 2002/32000/31999/31998/31997/3

30,000

25,000

20,000

15,000

10,000

5,000

0

23,097

9,173 9,920

24,233

20,891

10,581

18,944

20,919

27,81725,929 26,220

（Forecast）�

17,000(Planned)

8

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First, I would like to explain how we are developing a number of markets that have considerable potential. Our activities extend well beyond mobile phones, PCs and other information and communications products. We are also aggressively targeting DVD players, digital camcorders and other digital household appliances; inverters used in home appliances to cut energy consumption; and a variety of automotive electronics (see page 4~5).

Over the medium and long terms, there is no doubt that the information and communications markets will expand. However, market dynamics, demand for individual products and other forces inevitably experience short-term fluctuations. Nichicon needs to grow by having the agility to capitalize on opportunities in many markets while minimizing fluctuations in its own operating results. Doing this demands that we supply a broad array of products to an equally broad array of markets. These products extend from aluminum and tantalum electrolytic capacitors to circuit products and high-end capacitors using solid organic polymer construction.

A second strategy is to supply customers with products developed to meet specific needs rather than merely general-purpose components. This is why our circuit product business is expanding. Here, we develop hybrid ICs, switching power supplies that precisely match the requirements of customers’ finished products. In effect, we are selling “exclusive components” made solely for a particular product. Focusing on such value-added items cushions the impact of market downturns. Our success in expanding the circuit product business

In the first half of fiscal 2001, Nichicon and many other companies grew as they took aggressive steps to meet rising demand from manufacturers of information and communications products. Today, however, the situation is quite different. Electronic component manufacturers are faced with the pressing need to cope with a weakening market as demand falls for mobile phones, PCs and other key products for end users. It appears that many electronic component manufacturers that posted growth in fiscal 2001’s first half began to see their sales stagnate in the year’s second half. And indications point to a sharp drop in sales at these companies in fiscal 2002.

At Nichicon, though, we are estimating that sales will climb slightly in fiscal 2002. We believe that even a worst-case scenario would only cause our sales to fall marginally. Why? When I was named president in June 1998, I proclaimed that my goal was to strengthen our operations in four key product categories. In the ensuing years, we took many steps to accomplish this goal. One of the most significant was a capital expenditure program totaling ¥57,429 million.

We made progress in all four product categories. We increased our global market share even more in aluminum electrolytic capacitors. We are developing tantalum electrolytic capacitors

into our second core product category. We are expanding our circuit products business. And we have laid the groundwork for mass production of solid organic polymer aluminum electrolytic capacitors and solid organic polymer tantalum electrolytic capacitors. These efforts are rooted in our determination to avoid an over-reliance on information and communications products. We also want to avoid growth based solely on selling higher volumes of general-purpose components. Our goal is to supply high-end products, which are less susceptible to market fluctuations, to customers in a number of promising markets. This is the only viable path to growth. By implementing this strategy, we are establishing a structure where sales will not fall significantly when demand for such key products as mobile phones and PCs softens or there is a downturn in the electronic components market. In fact, our structure even makes it possible to raise sales in such adverse environments.

Due to the importance of this strategy, I would like to discuss them once again in detail.

To Our Shareholders

We will relentlessly take on the challenge of supplying high-end products to many attractive markets.

Net sales will be stable despite a slowing global economy.

Outlook and Strategies for Fiscal 2002 ＞＞�

9

has made a big contribution to our growth (see page 10~13).

Plans call for extending this “exclusive component” approach from circuit products to our capacitor business. We are determined to create original and customized capacitors. Opportunities are constantly appearing as electronic products become smaller, offer enhanced performance and pack more functions. We intend to create new types of electronic components that meet the needs of this new age by strategically focusing our formidable technological prowess on specific projects.

A third important strategy is the massive investments we have made in recent years to cut costs, boost product quality and shorten delivery times. I have already covered this point earlier in this letter. I want to stress that it is precisely because of these investments that we are now capable of supplying high-end components and other value-added items. I can say with confidence that we have almost completed the task of building a business structure that is highly immune to shifts in market conditions.

In fiscal 2002, we plan to make about ¥17,000 million in capital expenditures. Most will take place in capacitors for electronic devices and circuit products. Two years from now, we plan to construct a new head office building filled with high-tech facilities. This will further upgrade the information and communications and processing infrastructure of the entire Nichicon Group.

Last year, I stated that one of our goals was to build a global product development and supply capability. Here too, we are making steady progress. In fiscal 2001, we began production at NICHICON (SINGAPORE) PTE. LTD. of chip type aluminum electrolytic capacitors compatible with surface mounting equipment. NICHICON (MALAYSIA) SDN. BHD., in turn, has assumed responsibility for producing the aluminum electrolytic capacitors with leads that had been made in Singapore. We also set up a sales subsidiary in Bangkok. All these measures considerably improved our operations in Southeast Asia. In fiscal 2002, we expect to open an office in Shanghai (see page 14).

Nichicon will retain this aggressive posture regarding growth. We will not sit back and wait for the global economy to stage a rebound. Rather, today’s adverse conditions should be viewed as an excellent opportunity to heighten our awareness that we face a potential crisis and need to become more competitive. This is why we will relentlessly take on the challenge of creating new sources of earnings on our own.

In closing, I ask for your continued understanding and support as we take the actions needed to sustain our long-term growth.

June 30, 2001

Ippei Takeda�President & C.E.O.

Nichicon’s operations are divided into four business segments. Capacitors for electronics is the primary segment, including the mainstay aluminum and tantalum electrolytic capacitor lines. Circuit products represent mainly hybrid ICs and switching power supplies, and are developing into a new core business for Nichicon. Capacitors for power utilities consist mainly transformers and other electric power control equipment for buildings and factories. In others, the primary activity is the development of capacitor-related equipment.

Outside Japan, Nichicon has one sales subsidiary in North America and another in Europe. In Asia, there are three sales subsidiaries and five subsidiaries that conduct both sales and manufacturing. To better serve the way in which customers allocate their own overseas operations, Nichicon has separate organizations for specific user industries and important customers. Backed by this organization, Nichicon is aiming to propose, develop and supply the optimum product for each customer need. Due to these efforts, overseas sales in the past fiscal year increased 7.9% to ¥51,328 million, largely because of strength in the U.S. and Southeast Asia, and accounted for 42.3% of total sales.

10


Net Sales by Product Category (Millions of Yen)

Net Sales by Location (Millions of Yen)

Results by Business Segment

Results by Geographical Area

＞＞�

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Plastic film capacitors

Aluminum electrolytic capacitorsTantalum electrolytic capacitorsPlastic film capacitorsPositive thermisters “Posi-R”

Capacitor-related devices Capacitor raw materials

Switching power suppliesHybrid ICs

●Circuit products: 18.3%

●Capacitors for electric apparatus and power utilities: 4.6%

●Capacitors for electronics: 73.7%

Sales Breakdown by Operating Segments

Regional Sales Breakdown

●Others 3.4%

BritainFranceGermany

●Europe and others: 5.1%

China and ASEAN

●Asia: 20.6%

The U.S.BrazilMexico

●The Americas: 16.6%

●Japan: 57.7%

2001/32000/31999/31998/31997/30

30,000

60,000

90,000

120,000

50,918

17,663

19,8625,907

94,349

55,326

20,486

23,0396,923

105,774

54,415

20,264

22,9385,506

103,123

58,684

21,312

20,4135,837

106,246

69,873

24,984

20,1526,192

121,201

2002/3（Forecast）�

2001/32000/31999/31998/31997/30

30,000

60,000

90,000

120,000

89,304

22,2215,5964,080

121,201

88,800

25,0005,3003,900

123,000

94,349

2,8726,01410,591

74,872

81,531

15,3575,6833,202

105,774

77,694

17,6184,8802,930

103,123

78,171

19,0174,9564,102

106,246

11

Sales in this segment increased 14.2% to ¥89,304 million. Growth in the first half was supported by strong global demand from manufacturers of PCs, mobile phones and other information and communications products. Another factor was the benefit of past investments in additional output capacity to meet rising demand. Two items made particularly noteworthy contributions. First was investments to increase the company’s ability to meet its needs for aluminum electrode foil internally. Second was the development and mass production of solid organic polymer electrolytic capacitors, a rapidly expanding market category. New products mainly targeted the strategic information and communication markets. One recent introduction is a CSP type (Chip Size Package) tantalum electrolytic capacitor (1) that has a face-down electrode. This electrode placement permits dimensional accuracy to within a few microns and a more efficient use of the chip in relation to its volume. The result is reductions of about 50% in the chip’s circuit board footprint and about 60% in its volume, both in relation to conventional models. There were two notable R&D breakthroughs during the year: an aluminum electrolytic capacitor with snap-in terminals (2) thatgreatly reduces mounting space; and an ultra low-profile bi-polarized chip type aluminum electrolytic capacitor (3) that has the world’s lowest height (3.95mm) and can withstand temperatures of up to 105˚C. For the mobile phone market, Nichicon began selling a miniature aluminum electrolytic capacitor (4) for high-ripple current applications. In car electronics applications, an aluminum electrolytic capacitor(5) for extremely high temperatures (up to 150˚C) was well received by manufacturers. Nichicon also gained an excellent reputation among users of smoothing electrolytic capacitors, a component that is critical to sound quality in audio equipment. Many audio products equipped

with Nichicon’s KG series of these capacitors were ranked among the top in all four categories of a best-buy ranking published by HiVi magazine* in December 2000.

●Capacitors for Electronics

Current Term Review

Over the past few years, the information and communications markets have expanded rapidly. Growth is expected to slow in 2001 as the round of corporate IT investments ends and the U.S. economy enters a period of consolidation. Despite these negative factors, IT-related markets are certain to grow at a rate well above that of most other industries. PC demand, for instance, is projected to expand by about 10%. Nichicon will continue to target this attractive market, cutting costs, shortening delivery times and taking other steps to become more competitive. Initiatives will also include developing and manufacturing more high-end capacitors. To spur sales growth, Nichicon is targeting new sources of demand. One is the household appliance market, where manufacturers are increasingly utilizing digital and inverter technology. Car electronics is another field full of opportunities. Based on this outlook, Nichicon estimates that sales in this segment will decline only 0.6% from the past year’s record high to ¥88,800 million.

*Source: “HiVi” Best Buy Ranking. “HiVi” is the most widely read magazine (highest circulation) specializing in audio & visual equipment.

Outlook for the Next Term

＞＞�

＞＞�

Sales of Capacitors for Electronics (Millions of Yen)

2002/3（Forecast）

2001/32000/31999/31998/31997/30

20,000

40,000

60,000

80,000

100,000

74,87281,531

77,694 78,171

89,304 88,800

(1) (2) (3)

(4) (5)�

12


●Circuit Products

　In the market for information and communications products, a major application for Nichicon’s circuit products, significant growth is foreseen in mobile communications devices, including next generation mobile phones. Most significant is the fall 2001 launch in Japan of a next-generation mobile communication service. Success in this market requires the ability to fashion tiny components. Nichicon is responding with sophisticated technologies such as flip-chip bonding, which attaches semiconductor chips directly to a circuit board, and wire bonding. Advances of this type will lead to more new products and more refinements in manufacturing. Backed by this technology, the company will work hard to capture more orders for its circuit products. Nichicon is also targeting automotive components, which are making increasing use of electronic circuitry. Due to these factors, Nichicon estimates that sales in this segment will increase 12.5% to ¥25,000 million.

＞＞�

Sales of Circuit Units (Millions of Yen)

　Sales of circuit products increased 16.9% to ¥22,221 million. By product sector, switching power supply sales rose 11.6% to ¥14,420 million and hybrid IC’s sales were up 28.1% to ¥7,801 million. Much of this growth was attributable to higher demand from manufacturers of amusement devices and information-related products. Expansion in the past year positions circuit products to become a new core business for Nichicon alongside capacitors. 　Switching power supplies convert AC power to DC to meet the power supply requirements of specific circuitry. They are widely used in electronic products including PCs and TVs. Hybrid ICs place a variety of electronic components on a ceramic or resin circuit board to create a module that can perform a certain function. These ICs are indispensable to products as varied as car electronics, office equipment and industrial machinery. In recent years, demand for hybrid ICs from manufacturers of mobile phones and other mobile communications products has been skyrocketing. 　Several new products were unveiled during the year. A new ultra-low power consumption switching power supply (1) cuts standby mode power consumption in electronic devices to only 55mW, 95% less than before. This may lead to copiers, facsimile machines, and PCs where power can remain on for 24 hours a day. 　In the hybrid ICs sector, Nichicon began selling a paper gloss sensor (2) that can automatically sense paper grades with accuracy in copiers and printers. Nichicon also developed IPM*

technology, and a power module for motor driver power hybrid ICs was commercialized and mass production commenced.* IPM: Intelligent Power Module (A module developed by integrating a signal amplifier circuit in high-speed IGBT transistor.)

Current Term Review

Outlook for the Next Term

＞＞�

＞＞�

24,000

20,000

16,000

12,000

8,000

4,000

02001/32000/31999/31998/31997/3 2002/3

10,591

15,357

17,61819,017

22,221

25,000

（Forecast）

(1) (2)

13

　Sales of capacitors for electric apparatus and power utilities increased 12.9% to ¥5,596 million. A unified program by manufacturing and sales teams to raise sales made this growth possible. Another factor was a rebound in some categories of private-sector capital investment in the fiscal year’s first half. The “Geo Dry” a newly introduced dry type high voltage power capacitor with an environmental consciousness, also contributed to the increase in segment sales.

　Sales in this segment, mainly consisting of capacitor-related equipment and the export of raw materials for capacitors, declined 0.5% to ¥4,080 million. The decrease was chiefly the result of a fall in high-volume orders from universities and research institutions, a major source of growth in the past fiscal year. 　Nichicon made further gains in reinforcing its position as a supplier to leading-edge research institutions. In February 2001, Nichicon completed delivery of a power supplies for the accelerator of the radio-isotope beam factory of RIKEN (The Institute of Physical and Chemical Research). Another set of sophisticated power supplies, this one for a neutron beam injector, was delivered in June 2000 to the National Institute for Fusion Science (NIFS). Further demonstrating its expertise, Nichicon has developed and delivered a pulse beam generator, ETIGO IV, that produces the world’s highest performance, installed at Nagaoka University of Technologies.

　Sales are projected to decline 4.4% to ¥3,900 million. This outlook is based on expectations of a downturn in orders for capacitor-related equipment and other devices from universities and research facilities.

　With concerns rising about the direction of the U.S. economy, a softening in Japan’s private-sector capital expenditures is projected. This will create a challenging operating climate for capacitors for electric apparatus and power utilities. Based on this outlook, Nichicon estimates that sales will decrease 5.3% to ¥5,300 million.

●Capacitors for Electric Apparatus and Power Utilities

●Others

Sales of Capacitors for Electric Apparatus and Power Utilities (Millions of Yen) Sales of Others (Millions of Yen)

Current Term Review＞＞�Current Term Review＞＞�

Outlook for the Next Term＞＞� Outlook for the Next Term

＞＞�

0

1,000

2,000

3,000

4,000

5,000

6,000

0

1,000

2,000

3,000

4,000

5,000

2001/32000/31999/31998/31997/3 2001/32000/31999/31998/31997/3

6,0145,683

4,880 4,956

5,5965,300

2,8723,202

2,930

4,102 4,0803,900



14

News & Topics

Nichicon Technology Center Completed

NICHICON (MALAYSIA) SDN. BHD.

Nichicon Technology Center (Front gate)

Realignment and Enhancement of SE Asia Manufacturing

＞＞�

To step up its output of high-end capacitors, Nichicon has realigned and enhanced its production activities at subsidiaries in Southeast Asia. NICHICON (SINGAPORE) PTE. LTD., which was formed in 1978, has been designated to handle exclusively high-end capacitors. Behind this decision is the excellent infrastructure in Singapore and high level of technology available locally. Radial lead type aluminum electrolytic capacitors that had been produced in Singapore are now made at NICHICON (MALAYSIA) SDN. BHD., which was established in 1990. As a result, production capacity has increased. In NICHICON (SINGAPORE) PTE. LTD., production will focus on chip type aluminum electrolytic capacitors, marking the first time these components have been produced outside Japan. Rising demand is foreseen for use in digital household appliances, as well as in PCs and car navigation systems. Over the next three years, Nichicon plans to invest a total of S$50 million in Singapore for this purpose. Initially, monthly output of these chip capacitors will be 15 million units. In three years, this is to multiply by five times. At NICHICON (MALAYSIA) SDN. BHD., US$20 million of capital investments will be made to

create the infrastructure needed to handle the products transferred from NICHICON (SINGAPORE) PTE. LTD. Total monthly output capacity is slated to rise from the current 180 million units to 300 million over the next three years.

Two major projects were completed recently. In May 2001, a second wing of the Tomita factory, which is located in the city of Ohno in Fukui prefecture, was finished. In October 2000, construction of the head office factory of NICHICON (FUKUI) CORPORATION, a subsidiary established in February 2000, was completed. The Tomita factory began operations in July 1999. With this expansion, the facilities now acquired the entire industrial park where they are located, an area of about 200,000 square meters. Reflecting the sophisticated nature of their products and activities, and with the consent of Ohno city the area has been renamed the “Nichicon Technology Center”. Added capacity at Tomita was for the purpose of increasing output of aluminum electrode foil, an essential step in achieving an overwhelming lead in the market for aluminum electrolytic capacitors. Following completion of this project, Nichicon can meet about 90% of its foil needs internally. The company is now better able to respond to demand fluctuations of these materials. This step also speeds up deliveries and cuts the cost of these core Nichicon

products. At NICHICON (FUKUI) CORPORATION, production of solid organic polymer aluminum electrolytic capacitors has started. With this capacity, the company can supply a broad range of capacitors, extending from models for general-purpose applications to high-end designs to meet diversified market needs.

15

A Stronger Asian Sales System

A Rising Awareness of Environmental Issues

The First Move Toward an Integrated Data Management System

In February 2001, Nichicon established a sales subsidiary in Thailand called NICHICON (THAILAND) CO., LTD. This is part of a program to bolster sales capabilities, and follows the March 2000 formation of NICHICON (TAIWAN) CO., LTD. In all, there are now five overseas sales subsidiaries. The Thai economy contracted in the wake of the 1997 currency crisis. By 1999, however, growth in exports led to a rebound and the economy has been expanding ever since. The keys to this expansion are the electric machinery, electronics and automobile industries. Many air conditioner manufacturers are increasing output to meet demand in Europe, and still more growth is likely. Nichicon boasts a big lead in the market for aluminum electrolytic

capacitors used in air conditioner inverters. The company also has a reputation for excellence in durable aluminum electrolytic capacitors used in power supplies. In line with these strengths, Nichicon has created a support system of the same grade as in Japan. The goal is to enlarge sales channels while identifying and developing new sources of demand. We opened a marketing office in Shanghai, China, in June 2001. With these new sales bases, Nichicon is well positioned to increase its market share throughout Asia, a region where significant economic expansion is predicted.

Having established an environmental charter in 1996, Nichicon makes environmental management system an integral part of all its operations, an initiative called the “Green Project”. As part of this project, almost all production facilities have earned ISO 14001 certification for environmental management. Yet to be certified are the recently finished facilities at Ohmachi, Tomita, NICHICON (FUKUI) CORPORATION and NICHICON (SHIGA) CORPORATION. In the development of new products, Nichicon is studying ways to eliminate the need for polyvinyl chloride (PVC) and lead. Extending environmental programs outside the company is another theme. In the first step in this direction, Nichicon in October 2000 established an environmental preservation fund in the city of Ohno in Fukui prefecture, pledging to make additional contributions on a continuous basis. Ohno, home to three Nichicon factories, is renowned throughout Japan for the quality of its well water. To preserve this resource for future generations, the Ohno city council established a groundwater

protection fund. Nichicon donated ¥10 million upon the fund’s inception and pledged to contribute an additional ¥1 million every year.

Mitsuharu Amaya Mayor of Ohno City (Left) with Ippei Takeda President and C.E.O. of Nichicon Corp.Courtesy: THE FUKUI SHIMBUN

�

A program called “Genesys 2” was launched in February 2000 for the purpose of applying IT skills to establish a powerful data management and networking infrastructure. Beginning in April 2001, all facilities and offices of the company began preparations for the structuring of the software that will be the core of the new system. Introduction of this ERP* package, the “SAP R/3”, will yield numerous advantages: faster development of designing and programming, lower costs, compatibility with many languages and much more. With ERP, Nichicon will have a single, all-inclusive data management infrastructure for manufacturing, sales, logistics, accounting and other key functions. Management will be able to make decisions faster and allocate resources more efficiently. Work processes will also be revised as the new system is adopted. The result will be nothing less than an entirely new business model. Phase one of the ERP introduction will come in October 2001 when

a sales and order processing system goes on line. Finance and accounting will follow in April 2002. Nichicon anticipates significant gains in the speed and agility of its management style. * ERP = Enterprise Resource Planning

16

Financial Review＞＞� This section reviews Nichicon’s consolidated financial statements.

In the fiscal year ended March 31, 2001, net sales increased 14.1% to ¥121,201 million.

In the first half of the year, sales in Japan benefited from solid demand from manufacturers of mobile phones, PCs and peripherals, and digital household appliances. In the year’s second half, consumer spending weakened due to falling stock prices and other factors and a slowdown of Japanese economy became increasingly pronounced. In this environment, members of the information and communications industries cut back production levels and reduced inventories of components. To offset these challenges, Nichicon focused on the development and mass production of components for information and communications products, a field with considerable medium and long-term growth potential; components for digital household appliances, a new source of growth; and components for automotive applications. Reducing lead times and cutting costs were two more themes. As a result, Nichicon was able to maintain a strong level of orders through December 2000. Consequently, net sales in Japan rose 19.1% to ¥69,873 million.

Overseas, net sales increased due to strength in the U.S. and Southeast Asia. The second half of the year, however, saw a decline in orders as a slowdown in the U.S. economy caused the global economy to weaken. A rapid slowdown in Southeast Asia had an especially significant impact on orders. Despite these difficulties, the strong first half enabled Nichicon’s overseas subsidiaries to post higher sales on a local currency basis. In terms of yen, total overseas sales increased 7.9% to ¥51,328 million. As the yen’s strength reduced translations of foreign currency sales into yen by ¥2,583 million, sales at overseas subsidiaries fell by 2.5 percentage points as a share of total consolidated net sales.

Japan accounted for 57.7% of total sales and overseas markets for the remaining 42.3%, compared with 55.2% and 44.8%, respectively, in the prior fiscal year. The decline in the share of overseas sales is due to growth in demand within Japan and the negative effect of the yen’s strength on translations of foreign currency sales. By region, sales in the Americas were lower, but this was also due to the yen’s appreciation. Please see pages 10-13 for more information on sales by geographical region and product segment.

Cost of sales increased 12.1% to ¥97,078 million as materials purchased rose along with sales and depreciation expenses rose by ¥2,934 million due to large capital expenditures in recent years. However, the growth in cost of sales was less than the 14.1% increase in sales, so cost of sales fell by 1.4 percentage points to 80.1% of net sales. This improvement was mainly attributable to the success of company-wide initiatives to boost productivity, including cost reduction programs, notably an increase in the internal production of aluminum electrode foil, a key material used to make aluminum electrolytic capacitors.

Selling, general and administrative expenses increased 19.1% to ¥13,843 million, rising by 0.5 percentage point to11.4% of sales. Transportation and other logistics expenses climbed along with sales and there was an increase in retirement benefit liabilities.

As is discussed above, the growth in sales and effectiveness of cost reduction programs led to an increase in gross profit. On the other hand, results were negatively impacted by the yen’s appreciation, growth in depreciation expenses and an increase in the provision for retirement benefit liabilities. The result was a 28.0% increase in operating income to ¥10,280 million. Operating income improved by 0.9 percentage point to 8.5% of net sales.

In non-operating items, interest and dividends income declined from ¥1,248 million to ¥1,197 million. This was mainly because of lower interest rates and a decline in invested funds as internal resources were used to fund capital expenditures. Furthermore, the yen’s weakness from January 2001 resulted in a foreign exchange gain of ¥468 million. Sluggish stock market led to valuation loss of ¥227 million on securities. Others, net declined from ¥410 million to ¥260 million.

Due to the above factors, income before taxes and other adjustments increased 105.1% to ¥11,898 million. The adoption of tax effect accounting resulted in an income tax adjustment of ¥1,864 million. Net income thus increased 129.1% to ¥6,703 million. This resulted in a return on sales of 5.5%, an improvement of 2.7 percentage points. Earnings per share increased by ¥45.17 to ¥80.06.

Net Sales Cost of Sales, and SG&A Expenses＞＞� ＞＞�

Operating Income and Net Income＞＞�

17

* All percentage changes are rounded to the nearest tenth of a percent.

Total assets increased 13.8% to ¥174,901 million.

Current assets increased 21.7% to ¥90,526 million. This was mainly attributable to increases in trade receivables and inventories. Effective from this term we adopted the new accounting standard for financial instruments on market values. Securities balances in prior periods have been restated in the consolidated financial statements to conform to current term presentations. Property, plant and equipment increased 29.0% to ¥56,694 million as Nichicon’s capital expenditures climbed ¥5,010 million from the prior year to ¥25,929 million. Major elements of these expenditures were ¥3,811 million for aluminum electrode foil production machinery at the Ohmachi and Tomita factories; ¥8,279 million tantalum electrolytic capacitor production machinery at consolidated subsidiary NICHICON TANTALUM CORPORATION; and ¥4,636 million for organic polymer aluminum electrolytic capacitor production machinery at NICHICON (FUKUI) CORPORATION. All expenditures were funded internally. Depreciation expenses for the year increased 29.1% from the previous fiscal year to ¥13,026 million. Investments and others declined 17.6% to ¥27,681 million.

Current liabilities increased 43.8% to ¥43,477 million. Trade notes and accounts payable rose as Nichicon’s sales and capital expenditures increased. Long-term liabilities rose 33.3% to ¥11,765 million. This was mainly attributable to an addition of ¥859 million to the reserve for retirement benefits because of the impact of falling stock prices on funds invested to pay these benefits in the future. In addition, the discount rate used to determine the projected retirement benefit obligation was lowered from 3.5% to 2.8% because of lower prevailing rates in Japan. This caused the company to make a lump-sum additional charge of ¥2,319 million for accrued severance indemnities.

Working capital, the difference between current assets and current liabilities, was ¥47,049 million and the current ratio was 208.2%, declined of 37.7 percentage points from previous fiscal year’s 245.9%.

The year’s higher net income raised retained earnings, net of the repurchase and retirement of ¥2,693 million in common stock, by ¥2,893 million to ¥86,732 million. The application of market value accounting resulted in the inclusion in equity of ¥1,988 million in net unrealized holding gains on securities. This figure is obtained by subtracting the book value of securities holdings from their market

value, and then further subtracting a provision for deferred taxes. Treasury stock increased ¥84 million to support an ongoing stock option program for high-ranking managers. Due to these factors, shareholders’ equity increased ¥4,977 million to ¥119,603 million.

The shareholders’ equity ratio declined 6.2 percentage points from the previous fiscal year to 68.4%. Including the effect of the decrease in outstanding shares due to repurchases, and higher net income, equity per share climbed 6.3% to ¥1,453.78. The return on equity (ROE) for the year rose 3.1 percentage points to 5.7% and the return on total assets (ROA) climbed 3.3 percentage points to 7.2%.

Net cash provided by operating activities was ¥17,825 million, an increase of ¥6,352 million. Major causes of this growth were the ¥6,096 million increase in income before taxes and other adjustments to ¥11,898 million; the ¥2,934 million increase in depreciation and amortization to ¥13,026 million due to large-scale capital expenditures; and a ¥1,893 million decrease in tax payments to ¥3,734 million. Offsetting these items to some degree were the ¥2,486 million increase in receivables to ¥6,935 million and the ¥4,431 million increase in inventories to ¥4,820 million. The net effect of these items was a large increase in operating cash flows.

Net cash used in investing activities decreased ¥3,541 million to ¥9,341 million. Record high capital investment increased purchases of property, plant and equipment by ¥2,914 million to ¥21,153 million. However, as this entire amount was funded using internal resources, there were substantial proceeds from the sale of securities and a decrease in investments in time deposits. The result was a ¥3,209 million decline in purchases of securities to ¥2,075 million and a ¥1,729 million increase in proceeds from sales and redemptions of securities to ¥12,095 million. Proceeds from withdrawal of time deposits increased ¥1,872 million to ¥2,283 million.

Net cash used in financing activities increased ¥2,320 million to ¥3,916 million. The primary cause was the use of retained earnings to repurchase and retire common stock amounting to ¥2,693 million.

The net result of the above factors was a ¥5,030 million increase in cash and cash equivalents from ¥7,728 million to ¥12,758 million.

Cash Flows＞＞�

Financial Position＞＞�

18

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIESMarch 31, 2001 and 2000

)

)

)

12,758

18

10,078

31,038

312

40,804

11,487

21,129

1,664

2,666

90,526

4,328

27,447

124,818

1,182

157,775

101,081

56,694

22,731

1,673

2,285

1,287

295

27,681

—

174,901

7,728

2,289

8,722

24,421

244

32,899

12,598

15,335

1,019

2,495

74,363

4,187

25,104

103,265

1,050

133,606

89,645

43,961

28,584

1,724

2,430

1,173

309

33,602

1,822

153,748

¥

(

(

(

¥

)

)

)

)

)

)

¥

(

(

(

¥

$

(

(

(

$

102,972

145

81,341

250,508

2,521

329,328

92,712

170,533

13,430

21,515

730,635

34,933

221,525

1,007,413

9,539

1,273,410

815,827

457,583

183,465

13,501

18,442

10,386

2,378

223,416

—

1,411,634

2001 20012000

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Current assets:

Cash and cash equivalents

Time deposits

Trade receivable:

Notes

Accounts

Less: allowance for doubtful accounts

Short-term investments (Note 4)

Inventories (Note 5)

Deferred tax assets (Notes 2(10) and 13)

Other current assets

Total current assets

Property, plant and equipment:

Land

Buildings and structures

Machinery and equipment

Construction in progress

Less: accumulated depreciation

Net property, plant and equipment

Investments and other assets:

Investments in securities (Notes 4)

Investments in and advances to unconsolidated

subsidiaries and affiliates

Deferred tax assets (Notes 2(10) and 13)

Other

Less: allowance for doubtful accounts

Total investments and other assets

Adjustments on foreign currency

statement translation

Total assets

ASSETS

Millions of Yen Thousands of U.S. Dollars

(Note 3)

March 31, March 31,

The accompanying notes are an integral part of these statements.

Consolidated Balance Sheets＞＞�

19

)

7,648

11,670

19,318

4,854

1,441

3,325

—

1,308

30,246

8,246

131

450

8,827

49

—

14,287

17,065

83,839

—

—

565

114,626

153,748

9,158

13,999

23,157

9,625

4,766

3,722

6

2,201

43,477

11,126

171

468

11,765

56

14,287

—

17,065

86,732

1,988

180

649

119,603

174,901

¥

(

¥

¥

(

¥

) )

$

(

$

73,915

112,991

186,906

77,687

38,464

30,043

53

17,762

350,915

89,798

1,377

3,779

94,954

449

115,308

—

137,733

700,014

16,044

1,456

5,239

965,316

1,411,634

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Current liabilities:

Trade payable:

Notes

Accounts

Notes and accounts payable for construction

Accrued income taxes (Note 13)

Accrued expenses

Deferred tax liabilities (Notes 2(10) and 13)

Other current liabilities

Total current liabilities

Long-term liabilities:

Accrued severance indemnities (Notes 8)

Deferred tax liabilities (Notes 2(10) and 13)

Other long-term liabilities

Total long-term liabilities

Minority interest

Shareholders’ equity (Note 10):

Common stock, ¥50 par value:

Authorized

-138,480,000 shares at March 31,2001

-140,000,000 shares at March 31,2000

Issued:

-82,624,372 shares at March 31, 2001

-84,144,372 shares at March 31, 2000

Additional paid-in capital

Retained earnings

Net unrealized holding gains on securities (Note 11)



Less: treasury stock

Total shareholders’ equity

Total liabilities and shareholders’ equity

LIABILITIES AND SHAREHOLDERS’ EQUITY

�

2001 20012000


(Note 3)March 31, March 31,

20

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2001 and 2000

Consolidated Statements of Income

121,201

97,078

13,843

110,921

10,280

1,197

13

468

90

227

157

—

260

1,618

11,898

7,051

1,864

8

6,703

80.06

—

13.00

83,734

106,246

86,594

11,620

98,214

8,032

1,248

19

493

13

—

110

3,279

410

2,230

5,802

3,968

1,099

6

2,927

34.89

—

12.00

83,889

¥

(

(

(

(

¥

)

)

)

)

¥

(

(

(

(

(

(

¥

)

)

)

)

)

)

$

(

(

(

(

$

)

)

)

)

978,222

783,522

111,723

895,245

82,977

9,663

110

3,778

727

1834

1,267

—

2,100

13,057

96,034

56,912

15,050

65

54,107

0.65

—

0.10

83,734

Millions of Yen

For the year ended March 31, For the year ended March 31,

Yen

U.S. Dollars

(Note 3)


Thousands of U.S. Dollars(Note 3)

20002001 2001

Net sales (Note 14)

Operating costs and expenses (Note 14):

Cost of sales

Selling, general and administrative expenses (Note 12)

Total operating costs and expenses

Operating income (Note 14)

Other income (expenses):

Interest and dividend income on investments

Interest expenses

Foreign exchange gain (loss), net

Equity in net gains of affiliated company

Loss on valuation of short-term investments

and investments in securities

Net loss on sales or disposal of property, plant

and equipment

Past service cost of retirement benefits

Other, net

Total other income (expenses), net

Income before income taxes and minority interest

Income taxes (Notes 2(10) and 13):

Current

Deferred

Minority interest

Net income

Amount per share:

Net income:

Basic

Diluted

Cash dividends

Weighted average number of shares

(Thousands):

＞＞�

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21

14,287

—

—

—

—

—

—

14,287

—

—

—

—

—

—

—

14,287

84,144,372

—

—

—

—

—

—

84,144,372

—

—

—

—

—

—

1,520,000

82,624,372

17,065

—

—

—

—

—

—

17,065

—

—

—

—

—

—

—

17,065

0

—

—

—

—

—

565

565

—

—

—

—

—

2,777

2,693

649

(

(

(

(

(

)

)

)

)

)

(

(

(

(

(

(

)

)

)

)

)

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( )

(

(

(

)

)

)

(

(

)

)

79,704

2,927

1,008

28

73

2,317

—

83,839

6,703

1,089

28

—

—

—

2,693

86,732

�

84,144,372

—

—

—

—

—

—

1,520,000

82,624,372

115,308

—

—

—

—

—

—

—

115,308

—

—

—

—

—

—

—

—

—

—

—

1,988

—

—

—

1,988

—

—

—

—

16,044

—

—

—

16,044

—

—

—

—

—

—

—

—

—

—

—

—

180

—

—

180

—

—

—

—

—

1,456

—

—

1,456

137,733

—

—

—

—

—

—

—

137,733

676,665

54,107

8,793

226

—

—

—

21,739

700,014

4,555

—

—

—

—

—

22,423

21,739

5,239

�

�

Number ofshares of

common stock

Net unrealizedholding gainson securities

Adjustments onforeign currency


Net unrealizedholding gainson securities

Adjustments onforeign currency


Millions of Yen

Common stock

Additionalpaid-in capital

Retainedearnings

Treasurystock

Net income

Cash dividends paid

Bonuses to directors

Cumulative effect of change

in the affiliate’s accounting

Prior years’ tax effect from initial

application of accounting for

income taxes

Increase in treasury stock

Net income

Cash dividends paid


Increase due to valuation of securities




Repurchase and retirement of

treasury stock

Net income

Cash dividends paid


Increase due to valuation of securities




Repurchase and retirement of

treasury stock

Balance at March 31, 1999





Thousands of U.S. Dollars (Note 3)

Number ofshares of

common stockCommon

stockAdditional

paid-in capitalRetainedearnings

Treasurystock


¥

¥

¥

$

$

¥

¥

¥

$

$

¥

¥

¥

$

$

¥

¥

¥

$

$

¥

¥

¥

$

$

¥

¥

¥

$

$


Consolidated Statements of Shareholders’ Equity＞＞�

22

11,898

13,026

157

2,880

1,197

13

6,935

4,820

3,997

1,381

20,400

1,172

13

3,734

17,825

2,075

12,095

21,153

2,283

491

9,341

150

65

1,089

2,693

49

3,916

462

5,030

7,728

12,758

96,034

105,133

1,267

23,245

9,663

110

55,976

38,903

32,260

11,146

164,653

9,460

110

30,138

143,865

16,751

97,619

170,724

18,429

3,964

75,391

1,208

524

8,793

21,739

392

31,608

3,735

40,601

62,371

102,972

2001

¥

(

(

(

(

(

(

(

(

(

(

(

(

(

(

　　¥

)

)

)

)

)

)

)

)

)

)

)

)

)

)

5,802

10,092

110

3,032

1,248

19

4,449

389

4,801

1,918

15,852

1,267

19

5,627

11,473

5,284

10,366

18,239

411

136

12,882

907

343

1,008

—

24

1,596

495

2,510

10,238

7,728

¥

(

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(

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20012000

For the year ended March 31,

Millions of Yen

For the year ended March 31,


Thousands of U.S. Dollars(Note 3)


Consolidated Statements of Cash Flows

Operating activities:

Income before income taxes and minority interest

Adjustments for:

Depreciation and amortization

Net loss on sales or disposal of property, plant and equipment

Provision for accrued severance indemnities

Interest and dividend income

Interest expenses

Increase in notes and accounts receivable

Increase in inventories

Increase in notes and accounts payable

Other, net

Sub total

Interest and dividend income received

Interest expenses paid

Income taxes paid

Net cash provided by operating activities

Investing activities:

Payments for purchase of short-term investments


Proceeds from sales of short-term investments


Payments for purchase of property and equipment

Decrease in time deposits

Increase in other investments

Net cash used in investing activities

Financing activities:

Payments for purchase of treasury stock

Proceeds from sales of treasury stock

Cash dividends paid

Payments for repurchase of treasury stock

　　for retirement

Other, net

Net cash used in financing activities

Effect of exchange rate changes on cash and

cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

＞＞�

�

23

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIES

Fiscal year-end

March 31 December 31

January 31 February 28 February 28

January 31March 31March 31March 31

December 31 December 31 December 31December 31

Country of incorporation

Equity ownershippercentage at

March 31, 2001

NICHICON TANTALUM CORPORATIONASAHI ELECTRIC INDUSTRIES CO., LTD.NICHICON (IWATE) CORPORATION WAKASA ELECTRIC CORPORATIONDENDO CORPORATION NICHICON (FUKUI) CORPORATIONNICHICON (SHIGA) CORPORATIONNICHICON (AMERICA) CORP.NICHICON (HONG KONG) LTD.NICHICON (EUROPE) LTD.NICHICON (SINGAPORE) PTE. LTD.NICHICON (MALAYSIA) SDN. BHDNICHICON (TAIWAN) CO., LTD.

JapanJapanJapanJapanJapanJapanJapanU.S.A

Hong KongUnited kingdom

SingaporeMalaysiaTaiwan

100.0%100.0%100.0%100.0%95.0%

100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%

Name

(1) Principles of Consolidation

　　The accompanying consolidated financial statements have been prepared based on the accounts maintained by NICHICON CORPORATION (the “Company”) and its domestic consolidated subsidiaries in accordance with the provisions set forth in the Japanese Commercial Code (the “Commercial Code”) and Japanese Securities and Exchange Law, and in conformity with accounting principles and practices generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International Accounting Standards.　　The accounts of overseas subsidiaries consolidated with the Company are based on the financial statements prepared in conformity with generally accepted accounting principles (the “GAAP”) and practices prevailing in the countries where the subsidiaries have been incorporated. Financial statements have not been materially affected by the differences between the GAAP

prevailing in these countries and Japanese GAAP. Therefore, no adjustments have been reflected in the accompanying consolidated financial statements to present the accounts of the subsidiaries in compliance with Japanese accounting principles and practices.　　Certain account balances, as disclosed in the basic consolidated financial statements in Japan, have been summarized or reclassified to the extent deemed necessary to enable presentation in a form which is more familiar to readers outside Japan.　　The consolidated financial statements are not intended to present the consolidated financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan.

1. Basis of Presenting the Consolidated Financial Statements

　　Effective from the year ended March 31, 2001, NICHICON (SHIGA) CORPORATION, which was set up newly during the current year, NICHICON (FUKUI) CORPORATION and NICHICON (TAIWAN) CO., LTD, which increased their materiality of the impact on the consolidated financial statements, have been included in consolidation.　　The remaining 1 subsidiary as of March 31, 2001 and 2 subsidiaries as of March 31, 2000 were not consolidated because their combined assets, net sales, net income and retained earnings in the aggregate were not significant compared to those of the consolidated financial statements of the Companies.　　For the purpose of preparing the accompanying consolidated financial statements, all significant intercompany transactions, account

　　The Company had 14 subsidiaries as of March 31, 2001 and 12 subsidiaries as of March 31, 2000. The accompanying consolidated financial statements include the accounts of the Company and 13 (10 for 2000) of its subsidiaries (together, the “Companies”), which are listed below:

2. Summary of Significant Accounting Policies

Notes to the Consolidated Financial Statements＞＞�

balances and unrealized profits among the Companies have been eliminated. The amounts of certain subsidiaries have been included on the basis of fiscal periods ended within three months prior to March 31.　　The Company had 1 unconsolidated subsidiary and 11 affiliates as of March 31, 2001 and 2 unconsolidated subsidiaries and 12 affiliates as of March 31, 2000. The equity method is applied to the investments in 1 affiliate, Samwha Electric Co., Ltd. since the total net income and retain earnings of the unconsolidated subsidiaries and affiliates other than Samwha Electric Co., Ltd. are not material to the consolidated result of total net income and total retained earnings, respectively.　　The investments in the remaining unconsolidated subsidiaries and affiliates are carried at cost.

24

�

(2) Translation of Foreign Currency Financial Statements　　The accounts of the overseas consolidated subsidiaries are translated into Japanese yen by the methods prescribed under the statements issued by the Business Accounting Deliberation Council of Japan. Under this method, all assets and liabilities are translated at current rates while shareholders’ equity is translated at historical rates, and revenue and expense items are translated at the average rates during the year. The resulting translation adjustments are shown as “Adjustments on foreign currency statement translation” in the accompanying consolidated balance sheet. 　　Adjustments on foreign currency statement translation, which was recorded in assets as of March 31, 2000, has been changed to be shown in shareholders’ equity and minority interest in accordance with the revised statements, effective from the year ended March 31, 2001.

(3) Valuation of Securities　　As of March 31, 2000, securities listed on stock exchanges were valued at the lower of cost or market, cost being determined by the moving average method, and other securities were valued at cost determined by the moving average method.　　Under the “at the lower of cost or market” method, the comparison of cost with lower market value was made for specific securities, not on an aggregate basis.　　Effective from the year ended March 31, 2001, the Company and its domestic consolidated subsidiaries have adopted the new accounting standard for financial instruments issued by the Business Accounting Deliberation Council of Japan. Following the new standard, securities held by them are classified as held-to-maturity debt securities or “Other securities” based on holding purpose for valuation. Held-to-maturity debt securities are stated at amortized cost. Marketable “Other securities” are stated at market value. Adjustments to market value as gains, on one by one basis, are recorded as increase in shareholders equity, net of tax, while adjustments to market value as losses, on one by one basis, are charged to income for the year. Costs of their sales are determined by the moving average method. “Other securities” which are not marketable are stated at cost, cost being determined by the moving average method. 　　Securities are recorded in “Investments in securities” in investments and other assets except for securities due within one year, which are recorded in “Short-term investments” in current assets. The amounts of securities in the prior year have been reclassified to conform to the current year’s presentation on the accompanying consolidated balance sheets.　　The effect of the adoption of the new accounting standard for the year ended March 31, 2001, was not material.

(4) Inventories　　Finished goods and work in process are valued principally at cost determined by the average method. Other inventories are valued principally at cost determined by the moving-average method.

(5) Property, Plant and Equipment 　　Depreciation for the Company and its domestic consolidated subsidiaries is computed by the declining-balance method except for depreciation of buildings which acquired on or after April 1, 1998, at rates based on the estimated useful lives of assets.�

　　Depreciation of buildings which acquired on or after April 1, 1998 for the Company and its domestic consolidated subsidiaries is computed by the straight-line method at rates based on the same above.　　Depreciation for the overseas consolidated subsidiaries is principally computed by the straight-line method at rates based on the estimated useful lives of assets.　　The range of estimated useful lives is principally from 7 to 50 years for buildings and structure and from 4 to 11 years for machinery and equipment. 　　Normal repairs and maintenance including minor renewals and improvements are charged to income as incurred. Gain or loss on the disposal of property, plant and equipment is recognized in the period of disposal.�

(6) Capitalized Computer Software Costs　　Amortization of computer software, which is included in “Investments and other assets: Other” in the accompanying balance sheets and comprise costs of software used in the Company and its subsidiaries’ business, is principally computed on the straight-line method over 5 years, as the estimated useful lives.�(7) Foreign Currency Translation　　As of March 31, 2000, foreign currencies and short-term receivables and payables denominated in foreign currencies were translated into Japanese yen at the relevant exchange rates prevailing at the respective balance sheet dates, and long-term receivables and payables denominated in foreign currencies were translated at the historical rates prevailing at the transaction dates. 　　Effective from the year ended March 31, 2001, the Company and its domestic consolidated subsidiaries have adopted the new accounting standard for foreign currency transactions revised by the Business Accounting Deliberation Council of Japan, which required that all monetary assets and liabilities denominated in foreign currencies, whether short-term or long-term, are translated into Japanese yen at the relevant exchange rates prevailing at the respective balance sheet dates. There was no effect of the adoption of the revised standard for the year ended March 31, 2001. 　　Revenues and expenses are translated at the average rate during the year.

(8) Hedge Accounting　　The Company enters into forward foreign exchange contracts on export transaction to hedge its exposure to fluctuation in foreign exchange rate. At the respective balance sheets dates, the forward foreign exchange contracts satisfying certain conditions are matched with receivable denominated in foreign currencies, which are translated into yen at the contracted rate of exchange. Effective from the year ended March 31, 2001, gains and losses arising from changes in fair value of the forward foreign exchange contracts other than those described above are deferred on the balance sheet to the period in which gains and losses on receivables hedged are recognized to match gains and losses on the forward foreign exchange contracts.

(9) Leases　　Where the financing leases do not transfer ownership of the

25

leased property to the lessee during the terms of the leases, the leased property is not capitalized and the related lease expenses are charged to income in the periods incurred, as per the statements issued by the Business Accounting Deliberation Council.

(10) Income Taxes　　The Companies computed and recorded income taxes currently payable based upon taxable income determined in accordance with applicable tax laws. The Company and its domestic subsidiaries did not recognize deferred income taxes arising from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements at March 31, 1999.　　Effective April 1, 1999, they have adopted the accounting standard for effects of income taxes which was issued by the Business Accounting Deliberation Council of Japan. This standard requires that income taxes are accounted for under the assets and liabilities method. The effect of the initial application for the year ended March 31, 2000 was to increase net income by ¥1,099 million. The cumulative effect up to the beginning of the year of ¥2,317 million has been reported as prior years’ tax effect from initial application of accounting for income taxes in the consolidated statements of shareholders’ equity. As a result of the above effects, total assets and retained earnings at March 31, 2000 increased by ¥3,449 million and ¥3,416 million, respectively.

(11) Accrued Severance Indemnities and Pension Plan　　Under the terms of the retirement plan of the Company, employees of the Company with more than 3 years of service are generally entitled to receive lump-sum payments on the time of retirement.　　The amount of the retirement benefit is, in general, determined based on the length of service, the cause of retirement, and the remuneration at the time of retirement.　　The Company also has a contributory pension plan which is interrelated with Japanese government social welfare program which consists of a basic portion requiring employee and employer contributions plus an additional portion established by the Company. The Company and its domestic consolidated subsidiaries have non-contributory pension plan. The amount of severance indemnities to be paid by the Company and its subsidiaries is reduced by the benefits payable under these pension plans.　　Accrued severance indemnities and Pension Plan of the Company and its domestic consolidated subsidiaries were mainly stated at the present value of the vested benefit obligation which would be required if all employees voluntarily terminated their employment at the balance sheet dates, and the Companies recognized pension contribution as expenses when paid until the year ended March 31, 1999.　　Effective April 1, 1999, the Companies’ accounting treatments of accrued severance indemnities and pension contribution were unified, and the amount of accrued severance indemnities were provided based on the amount of projected benefit obligation minus pension plan assets at fair value, which is substantially same accounting treatment as the method described under the new accounting standard for retirement benefits issued by the Business Accounting Deliberation Council of Japan,

effective from the fiscal year beginning after March 31, 2000.　　This accounting change was made to provide a more proper allocation of the cost of retirement benefits and further strengthen the financial position, preparing for future increase in cost of retirement benefit. The effect of this change was to increase operating profit by ¥77 million and decrease income before income taxes and minority interests by ¥3,200 million, compared with the amount which would have been recorded under the method applied in previous years.　　In the year ended March 31, 2001, the discount rate used to determine the projected benefit obligation has been changed from 3.5% to 2.8%. The effect of this change for the year ended March 31, 2001 was to decrease income before income taxes and minority interest by ¥2,319 million ($18,721 thousand).　　The directors and statutory auditors of the Company are covered by a retirement benefit plan under which the retiring directors and statutory auditors are entitled to receive lump-sum retirement benefits. The amount of such benefits is determined based on the Company’s internal rules. The accrued severance indemnities for the directors and statutory auditors represent the estimated amount to be paid if all directors and statutory auditors retired at the balance sheet dates.

(12) Research and Development Expenses�　　Research and development expenses are charged to income as incurred.�(13) Appropriation of Retained Earnings　　Under the Commercial Code and the Articles of Incorporation of the Company, proposals by the Board of Directors for the appropriation of retained earnings (principally the payment of annual cash dividends) should be approved by a shareholders’ meeting which must be held within three months after the end of each financial year. The appropriation of retained earnings reflected in the accompanying consolidated financial statements for each financial year represents the appropriations which were approved by the shareholders’ meeting and disposed of during that year but which related to the immediately preceding financial year.　　The payment of bonuses to directors is made out of retained earnings instead of being charged to income for the year and constitutes a part of appropriations referred to above.

(14) Net Income and Dividend per Share　　Basic net income per share is based upon the weighted average number of shares of common stock outstanding during each year.　　Diluted net income per share is not applicable, due to no outstanding warrants and convertible bonds.　　Cash dividends per share represent interim dividend paid and annual dividends declared as applicable to the respective years.

(15) Cash and Cash Equivalents　　Cash and cash equivalents in the consolidated statements of cash flows are composed of cash on hands, bank deposits be able to withdraw on demand and bank deposits with original maturity of three months or less.

(16) Reclassifications　　Certain prior-year amounts have been reclassified to conform to the current year’s presentation.

26

　　The Company prepares its consolidated financial statements in Japanese yen. The U.S. dollar amounts included in the accompanying consolidated financial statements and notes thereto represent the arithmetical results of translating yen into dollars at the rate of ¥123.90 to U.S.$1, being the effective rate of exchange

at March 31, 2001. The inclusion of such dollar amounts is solely for convenience and is not intended to imply that yen amounts have been or could be readily converted, realized or settled in dollars at the rate of ¥123.90 to U.S.$1 or at any other rate.

3. United States Dollar Amounts

　　Short-term investments and investments in securities held by the Companies as of March 31, 2001 and 2000 were summarized as follows:

4. Short-term Investments and Investments in Securities

Short-term investments:　Government and corporate bonds　Other

Investments in securities:　Equity securities　Government and corporate bonds　Other

�.. . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .��

.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .��

8,2613,226

11,487

7,49714,934

30022,731

¥

¥

¥

¥

66,67526,03792,712

60,509120,535

2,421183,465

$

$

$

$

7,7904,808

12,598

3,98524,599

—28,584

¥

¥

¥

¥

2001 20012000

Thousands of U.S. Dollars

March 31,

　　Book value and market value information in respect of marketable held-to-maturity debt securities on short-term investments and investments in securities as of March 31, 2001 were as follows:

Millions of Yen Book value

perbalance sheet

Marketvalue Difference

Book value per

balance sheet DifferenceMarketvalue


Short-term investments:

　Government bonds　Corporate bonds

Investments in securities:　Government bonds　Corporate bonds

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

��

.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�

6,0582,2038,261

7,8404941

12,78121,042

6,0982,2188,316

8,0205,091

13,11121,427

401555

180150330385

¥

¥

¥

¥

¥

¥

48,89817,77766,675

63,27939,874

103,153169,828

49,21717,90267,119

64,72741,095

105,822172,941

319125444

1,4481,2212,6693,113

$

$

$

$

$

$

605

2,8962,095

2515,847

1,1917,038

652

6,3162,153

3009,421

1,04410,465

47

3,4205849

3,574

1473,427

¥

¥

¥

¥

¥

¥( ) )

4,879

23,37616,9082,027

47,190

9,61956,802

5,259

50,97717,3822,421

76,039

8,42584,464

380

27,601474394

28,849

1,18727,662

$

$

$

$

$

$

Securities whose book values on the accompanying consolidated balance sheet exceed their acquisition costsShort-term investments:　OtherInvestments in securities:　Equity securities　Government and corporate bonds　Other

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�

Securities whose book values on the accompanying consolidated balance sheet do not exceed their acquisition costs

Investments in securities:　Equity securities　　　Total

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of Yen

March 31,

Millions of Yen

Acquisition cost

Book value per

balance sheet Difference Acquisition

cost

Book value per

balance sheet Difference


　　Book value and acquisition cost information in respect of marketable “Other securities” as of March 31, 2001 were summarized as follows:

(

27

　　Book values of the securities which are not marketable as of March 31 2001, were mainly summarized as follows:

　　“Other securities” sold during the year ending March 31, 2001 were as follows:

Short-term investments:　OtherInvestments in securities:　Equity securities

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,574

1372,711

¥ 20,778

1,10721,885

$


Investments in securities:　Equity securities　Government and corporate bonds

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .��

3,76824,38128,149

8,97425,08534,059

5,206704

5,910

¥

¥

¥

¥

¥

¥

Millions of Yen

　　Book value and market value information on investments in securities held by the Companies as of March 31, 2000 were summarized as follows:

　Government bonds　Corporate bonds　Other

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Millions of Yen

63¥ 29 3¥¥

6,0402,8002,574

11,414

¥

¥

8,0207,050

—15,070

¥

¥

48,74922,59920,77992,127

$

$

64,73056,901

—121,631

$

$

2002 2003-2006 2002 2003-2006

�

Proceeds of sales gain on sales loss on sales


509 232 21$$$

Book value per balance sheet

Market value Unrealized gain

Proceeds of sales

gain on sales loss on sales

　　The aggregate annual maturities of debt securities included in “Other securities” and held-to-maturity debt securities outstanding as of March 31, 2001 were as follows:

　　Book values of securities, which were excluded from the above disclosure of book value and market value information on short-term investments and investments in securities held by the Companies as of March 31, 2000, were as follows:

　　The market value information on these securities is not required under Japanese GAAP.

Short-term investments:　Government and corporate bonds　Other securitiesInvestments in securities:　Equity securities　Government and corporate bonds

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .��

.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,7904,808

217218

¥

Millions of Yen

Finished goodsWork in processRaw materials and supplies

　　Inventories as of March 31, 2001 and 2000 consisted of the followings:

5. Inventories

2001 20012000


March 31, March 31,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,8875,2714,971

21,129

¥

¥

87,86942,54640,118

170,533

$

$

7,7064,1233,506

15,335

¥

¥

28

　　The Company enters into forward foreign exchange contracts on export transactions to hedge its exposure to fluctuations in foreign exchange rates. These hedging instruments are measured for effectiveness based on the movement amounts of positions

hedged during the hedging terms. 　　The Company’s management believes that there is no credit risk since they are executed with creditworthy financial institutions.

6. Derivatives and Hedging Activities

(1)　The companies lease certain machinery and equipment and other assets. Total lease expenses under these leases were ¥117 million ($946 thousand) and ¥111 million for the years ended March 31, 2001 and 2000, respectively.　　Additional information such as the notional acquisition costs

and accumulated depreciation as of March 31, 2001 and 2000, requested by the Business Accounting Deliberation Council of Japan, to be disclosed as not included in the accompanying consolidated balance sheets were as follows:

7. Lease Commitments

Machinery and equipmentOther

Less: Accumulated depreciation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . .

404 88

492 ( 286 )

206

¥

¥

3,261 708

3,969 ( 2,307 )

1,662

$

$

358 104 462

( 225 )237

¥

¥

2001 20012000


March 31,

(2) 　The aggregate future lease payments under ordinary operating leases as of March 31, 2001 and 2000 were as follows:

157

22

¥

¥

11759

176

$

$

172037

¥

¥

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2001 20012000


March 31,

Due within one yearDue after one year

Millions of Yen

March 31,

Millions of Yen

March 31,

　　Notional depreciation expense for the years ended March 31, 2001 and 2000, which is not reflected in the accompanying consolidated statements of income were ¥117 million ($946 thousand) and ¥111million.　　Notional acquisition costs means the costs which is

characterized as the total lease payment, including interest due to the immateriality of the leased property. Notional depreciation expense is calculated by the straight-line method assuming that there is no scrap value over the terms of the lease based on notional acquisition costs.

The amount of notional acquisition costs and future lease payments under finance leases included the imputed interest expenses portion.

　　The aggregate future lease payments under finance leases as of March 31, 2001 and 2000 were as follows:

Due within one yearDue after one year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2001 20012000


March 31,

114 92

206

¥

¥

922 740

1,662

$

$

109 128 237

¥

¥

Millions of Yen

March 31,

29

　　The following provided a reconciliation of projected benefit obligation to net liability for employees’ retirement benefit recognized on the accompanying consolidated balance sheet as of March 31, 2001.

8. Accrued Severance Indemnities

　　Service cost does not include employees’ contribution of contributory pension plan.　　The benefit obligation was determined using a discount rate of 2.8%, and the expected rate of return on plan assets was 2.0% for the year ended March 31, 2001. The benefit obligation is attributed to periods based on years of service.

Actuarial differences are charged or credited to income when arisen.　　The projected benefit obligations of certain subsidiaries are calculated using simplified method, which is permitted to be applied by small size of companies, in conformity with the accounting standard for retirement benefits.

　Projected benefit obligation　Fair value of plan assets　Accrued severance indemnities for employees

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . .

( 23,803 )�12,937

( 10,866 )

¥ ( 192,111 )104,411( 87,700 )

$


　　Components of net periodic benefit cost for the year ended March 31, 2001 were summarized as follows:

　Service cost　Interest cost　Expected return on plan assets　Amortization of acturial differences　Net periodic benefit cost

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

995568

( 251 )3,3564,668

¥

¥

8,0344,583

( 2,025 )27,08737,679

$

$


As of March 31, 2001, there was no contingent liability.

9. Contingent Liabilities

　　Under the Commercial Code, at least 50 % of the issue price of new shares, with a minimum of the par value thereof, is required to be designated as stated capital. The portion which is to be designated as stated capital is determined by resolution of the board of directors. Proceeds in excess of the amounts designated as stated capital are credited to additional paid-in capital.　　The Commercial Code provides that an amount equal to at least 10 % of cash dividends and other appropriations of retained earnings paid out with respect to each financial period be set aside in a legal reserve until such reserve equals 25 % of the amount of common stock. This reserve may be transferred to common stock by a resolution of the board of directors or used to reduce a deficit with the approval of a shareholders' meeting but is not available for dividend payments.　　At the annual general meeting held in June 26, 1998, the shareholders of the Company approved a stock repurchase plan in order that the Company might retire up to 7,000 thousand shares of its common stock through reduction of retained earnings, subject to the approval of the board of directors.　　On February 23, 2001, the board of directors declaredretirement of 3,000 thousand shares of the common stock through

reduction of retained earnings. The Company repurchased and retired 1,520 thousand shares and 1,480 thousand shares of its common stock, and reduced ¥2,693 million ($21,739 thousand) and ¥2,569 million ($20,734 thousand) of retained earnings, during the period from the date of the board of directors’ declaration to March 31, 2001 and from April 1, 2001 to the date of the annual general meeting, June 28, 2001, respectively.　　The shareholders of the Company approved stock option plans as the annual general meeting held in June 1999, 2000 and 2001. The plan approved in June 1999 allows eligible directors and employees to purchase up to 116 thousand shares and 204 thousand shares of the Company’s common stock in the aggregate respectively, and the stock options are exercisable from July 1, 2001 to June 30, 2004. The plan approved in June 2000 allows eligible employees to purchase up to 34 thousand shares of the Company’s common stock in the aggregate, and the options are exercisable from July 1, 2002 to June 30, 2005. The plan approved in June 2001 allows eligible directors and employees to purchase up to 52 thousand shares of the Company’s common stock in the aggregate, and the options are exercisable from July 1, 2003 to June 30, 2006.

10. Shareholders’ Equity

30

　　Selling, general and administrative expenses in the accompanying consolidated statements of income, for the years ended March 31, 2001 and 2000 consisted of the following:

12. Selling, General and Administrative Expenses

　　Unrealized holding gains on securities, net of tax in shareholders’ equity as of March 31, 2001 are analyzed as follows:

11. Unrealized Holding Gains on Securities

Market value in excess of costsDeferred tax liabilitiesUnrealized holding gains on securities, net of tax

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . .

3,4271,4391,988

¥

¥

27,66211,61816,044

$

$


��(��

��)��

��(��

��)��

13. Income Taxes

　　The Company and its domestic consolidated subsidiaries are subject to a number of different taxes based on income, which in the aggregate indicate a normal effective statutory income tax rate

of approximately 42% for the year ended March 31, 2001 and 2000. Foreign consolidated subsidiaries are subject to income taxes of the countries in which they operate.

　　The reconciliation of the differences between the statutory rate and the effective income tax rate as of March 31, 2000 were as follows:

　　The reconciliation of the differences between the statutory rate and the effective income tax rate as of March 31, 2001 was not disclose because the differences between the statutory rate and the effective income tax rate was not material.

Freight chargeAdvertisementsEmployees’ salary and bonusesResearch and development expensesOther

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,527 246

3,501 1,195 6,374

13,843

¥

¥

20,398 1,983

28,259 9,641

51,442 111,723

$

$

2,197 222

3,216 1,297 4,688

11,620

¥

¥

2001 20012000

Thousands of U.S. DollarsFor the year ended March 31,

Millions of Yen For the year ended March 31,

Statutory tax rate

　Expenses not deductible for income tax purposes　Revenues not deductible for income tax purposes　Effect on elimination of dividend income received　OtherEffective tax rate

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�

.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�

41.7%

0.9 　(　 3.4 )

6.4 3.8

49.4%

31

　　The significant components of deferred tax assets and liabilities as of March 31, 2001 and 2000 were summarized as follows:

Deferred tax assets due to:　Accrued severance indemnities　Unrealized gain/loss on inventories　Accrued enterprise taxes　Other

Deferred tax liabilities due to:　Unrealized holding gains on “Other securities”　Other

Net deferred tax assets

�.. . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

��.. .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .��

.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�.

4,051 662 423 591

5,727

1,439 516

1,955 3,772

¥

¥

32,696 5,347 3,410 4,770

46,223

11,618 4,163

15,781 30,442

$

$

2,785 425 143 461

3,814

— 496 496

3,318

¥

¥

2001 20012000


March 31,

Millions of Yen

March 31,

　　Net deferred tax assets were included in the accompanying consolidated balance sheets as follows:

Current assets:　Deferred tax assetsInvestments and other assets:　Deferred tax assetsCurrent liabilities:　Deferred tax liabilitiesLong-term liabilities:　Deferred tax liabilities

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,664

2,285

( 6)

( 171) 3,772

¥

¥

13,430

18,442

( 53)

( 1,377) 30,442

$

$

1,019

2,430

—

( 131) 3,318

¥

¥

2001 20012000


March 31,

Millions of Yen

March 31,

　　Segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2001 and 2000 presented below:

14. Segment Information

(1) Industry segment　　The Companies’ main operations are manufacturing and distributing capacitors and their related products. The Companies’ operations by business segment for the year ended March 31, 2001 and 2000 are not disclosed since the ratios of business other than

main operations described above to total in respect of sales, operating income and assets are not material, being less than 10% as stipulated in the Japanese Disclosure Rule of Consolidated Financial Statements.

(2) Geographic segment　　The foreign operations of the Companies for the years ended March 31, 2001 and 2000 were summarized as follows:

Millions of Yen

Sales:　Outside customer　IntersegmentTotal sales Operating costs and expensesOperating income

Assets

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�

76,11938,660

114,779105,283

9,496

125,803

19,9196

19,92519,011

914

11,502

20,4521,996

22,44821,672

776

12,397

¥

¥

¥

¥

¥

¥

¥

¥

¥

4,711 2

4,713 5,056

( 343)

2,606

¥

¥

¥

— ( 40,664) ( 40,664) ( 40,101) ( 563)

22,593

¥

¥

¥

121,201—

121,201110,92110,280

174,901

¥

¥

¥

Year ended March 31, 2001 Japan America Asia Other Consolidated

Elimination and

corporate

32

Japan America Asia Other Consolidated

Elimination and

corporate


Assets

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�

Year ended March 31, 2001


614,359312,026926,385849,74076,645

1,015,358

160,76746

160,813153,438

7,375

92,830

165,06816,113

181,181174,918

6,263

100,055

$

$

$

$

$

$

$

$

$

38,028 13

38,041 40,809

( 2,768)

21,040

$

$

$

— (328,198) (328,198) (323,660) ( 4,538)

182,351

$

$

$

978,222—

978,222895,24582,977

1,411,634

$

$

$

　　Unallocated corporate assets which were included in “Elimination and corporate” were ¥35,891million ($289,679 thousand) and ¥42,910 million as of March 31, 2001 and 2000, respectively.

(3) Sales to foreign customers　　Sales to foreign customers for the years ended March 31, 2001 and 2000 consisted of the followings:

Millions of Yen

America Asia Other Total



Sales to foreign customers Consolidated sales Ratio of sales to foreign customers　to consolidated sales

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


20,152—

16.6%

¥ 24,984—

20.6%

¥ 6,192—

5.1%

¥ 51,328121,201

42.3%

¥

Millions of Yen


. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .�

�.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


　　At the general shareholders’ meeting of the Company held on June 28, 2001, the payments of cash dividends ¥6.0 ($0.05) per share and directors’ bonuses were approved, which amounted

to ¥494 million ($3,984 thousand) and ¥32 million ($258 thousand), respectively.

15. Subsequent Event

20,414—

19.2%

¥ 21,312—

20.1%

¥ 5,837—

5.5%

¥ 47,563106,246

44.8%

¥

162,649—

16.6%

$ 201,648—

20.6%

$ 49,974—

5.1%

$ 414,271978,222

42.3%

$

65,48534,781

100,26692,8837,383

98,795

20,08723

20,11019,773

337

9,662

16,5301,717

18,24717,957

290

12,649

¥

¥

¥

¥

¥

¥

¥

¥

¥

4,144 5

4,149 4,365

( 216)

2,194

¥

¥

¥

— ( 36,526) ( 36,526) ( 36,764)

238

30,448

¥

¥

¥

106,246—

106,24698,2148,032

153,748

¥

¥

¥

Millions of Yen


Assets

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year ended March 31,2000 Japan America Asia Other Consolidated

Elimination and

corporate

33

Report of Independent Certified Public Accountants

We have audited the accompanying consolidated balance sheets of NICHICON CORPORATION and its consolidated subsidiaries as of March 31, 2001 and 2000, and the related consolidated statements of income, shareholders’ equity and cash flows for the years then ended, all expressed in Japanese Yen. Our audits were made in accordance with auditing standards, procedures and practices generally accepted and applied in Japan and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the consolidated financial statements referred to above present fairly the consolidated financial position of NICHICON CORPORATION and its consolidated subsidiaries as of March 31, 2001 and 2000, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles and practices generally accepted in Japan (see Note 1) applied on a consistent basis, except for the change, with which we concur, made as of March 31, 2000 in the method of accounting for accrued severance indemnities and pension plan as described in Note2 (11).

As described in Notes 2, effective from the year ended March 31, 2001, NICHICON CORPORATION and its domestic consolidated subsidiaries have adopted new Japanese accounting standards for financial instruments and retirement benefits.

The amount expressed in U.S. dollars, which are provided solely for the convenience of the reader, have been translated on the basis set forth in Note 3 to the accompanying consolidated financial statements.

The Board of Directors NICHICON CORPORATION

ChuoAoyama Audit Corporation

Osaka, JapanJune 28, 2001

＞＞�

34

Consolidated Subsidiaries

NICHICON TANTALUM CORPORATION 690-2, Miosato, Adogawa-cho, Takashima-gun, Shiga Pref., 520-1215, Japan.TEL.81-740-32-1250 FAX.81-740-32-1504

Capital Stock : 316 million yenProduct line : Tantalum electrolytic capacitors ISO 9001, ISO14001 & QS-9000 certified

ASAHI ELECTRIC INDUSTRIES CO., LTD.120 Hirasawa, Matoba, Shiwa-cho, Shiwa-gun, Iwate Pref., 028-3308, Japan.TEL.81-19-676-4511 FAX.81-19-676-6710

Capital Stock : 100 million yenProduct line : Aluminum electrolytic capacitors (Miniature-sized type) ISO 9002, ISO14001 & QS-9000 certified

NICHICON (IWATE) CORPORATION8-17-1, Kubo, Iwate-cho Iwate-gun, Iwate Pref., 028-4305, Japan.TEL.81-195-62-5311 FAX.81-195-62-3400

Capital Stock : 100 million yenProduct line : Aluminum electrolytic capacitors (Chip type)ISO 9002, ISO14001 & QS-9000 certified

WAKASA ELECTRIC CORPORATION30-1-1 Tentokuji, Kaminaka-cho, Onyu-gun, Fukui Pref., 919-1543, Japan.TEL.81-770-62-1121 FAX.81-770-62-0620

Capital Stock : 84 million yenProduct line : Tantalum electrolytic capacitors, switching powersupplies ISO 9002 certified at Obama Factory & ISO14001 certified

DENDO CORPORATION2-27, Dendo, Nishine-cho Iwate-gun, Iwate Pref., 028-7112, Japan.TEL.81-195-76-2424 FAX.81-195-76-5252

Capital Stock : 50 million yenProduct line : Switching power supplies ISO 9002 & ISO14001 certified

Domestic :

NICHICON (AMERICA) CORP.927 East State Parkway, Schaumburg, Illinois60173, U.S.A.TEL.1-847-843-7500 FAX.1-847-843-2798

Capital Stock : 3 million US$Business line : Sales of various kinds of capacitors

NICHICON (HONGKONG) LTD.Unit 308, Harbour Centre Tower 1, 1 Hok Cheung Street, Hunghom, Kowloon, Hong Kong.TEL.852-2363 4331 FAX.852-2764 1867

Capital Stock : 5 million HK$Business line : Sales of various kinds of capacitors

NICHICON (EUROPE) LTD.Coliseum Business Centre, Riverside Way, Camberley, Surrey GU15 3YL, United Kingdom,TEL.44-1276-685393 FAX.44-1276-686531

Capital Stock : 1 million STG£Business line : Sales of various kinds of capacitors

NICHICON (SINGAPORE) PTE. LTD.No.6 Ang Mo Kio Industrial Park 2, Singapore 569499TEL.65-4815641 FAX.65-4816485

Capital Stock : 8 million SP$Business line : Production of aluminum electrolytic capacitors (miniature-sized and chip type), and sales of 　　　　　　various kinds of capacitorsISO 9002, QS-9000 & ISO14001 certified

NICHICON (MALAYSIA) SDN. BHD.No.4 Jalan P/10, Kawasan Perusahaan Bangi, 43650 Bandar Baru Bangi, Selangor Darul Ehsan, MalaysiaTEL.60-3-8250678 FAX.60-3-8250858

Capital Stock : 63 million M$Business line : Production & sales of aluminium electrolytic capacitors　　　　　　(Miniature-sized and large can type)ISO 9002, QS-9000 & ISO14001 certified

NICHICON (TAIWAN) CO., LTD.16F-12, No.6, Sec.4, Hsin-Yi Rd., Taipei, Taiwan TEL.886-2-2708-0200 FAX.886-2-2708-0959

Capital Stock : 30 million NT$Business line : Sales of various kinds of capacitors

Overseas :

＞＞�

NICHICON (FUKUI) CORPORATIONNichicon Technology Center, 4 Tsuchifugo, Ohno-shi, Fukui Pref., 912-0805, Japan.TEL.81-779-65-8800 FAX.81-779-65-8801

Capital Stock : 100million yenProduct line : Aluminum electrolytic capacitors (Organic polymer type)

NICHICON (SHIGA) CORPORATION3-1, Yagura 2-chome, Kusatsu-shi, Shiga Pref., 525-0053, Japan. TEL.81-77-563-1181 FAX.81-77-563-1208

Capital Stock : 50million yenProduct line : Tantalum electrolytic capacitors

35

Corporate Data

(Yen)

3,500

3,000

2,500

2,000

1,500

1,000

1996 1997 1998 1999 2000 2001

Ippei TakedaTatou IwasaHirozo OhshimaHayao KatoKoichi MitsuiHidetaka KurumizawaKiyomi MatsutaNobuo HizakiSachito UmemuraTadayoshi NishizawaKenji TaiShinzo MatsuiKeiji NishihataTakashi HosomiKouzo Yamazaki

August 1, 1950

14,286 million yen (As of March 31, 2001)

1,712 (As of March 31, 2001)

President & C.E.O.Managing Director

Director

Standing Auditor

Auditor

Date of Establishment

Capital Stock

Number of Employees

Uehara Bldg., Oikedori, Karasumahigashi-iru, Nakagyo-ku, Kyoto, 604-0844, Japan.TEL.81-75-231-8461 FAX.81-75-256-4158

Head Office

Board of DirectorsAs of 30 June, 2001

5-5, 2-Chome, Hamamatsu-cho, Minato-ku, Tokyo, 105-0013, Japan.TEL.81-3-5473-5611 FAX.81-3-5473-56513-2, Sugahara-cho, Kita-ku, Osaka, 530-0046, Japan.TEL.81-6-6362-6421 FAX.81-6-6365-703318/F, Nishiki Park Bldg., 4-3, Nishiki 2-chome, Naka-ku, Nagoya, 460-0003, Japan.TEL.81-52-223-5581 FAX.81-52-220-1839

Sapporo, Sendai, Mito, Tochigi, Kumagaya, Hachioji, Numazu, Nagano, Hiroshima, Tottori, Takamatsu, Fukuoka

TOKYO SALES OFFICE

OSAKA SALES OFFICE

NAGOYA SALES OFFICE

Sales Branches

Offices

3-1, Yagura 2-chome, Kusatsu-shi, Shiga Pref., 525-0053, Japan.TEL.81-77-563-1181 FAX.81-77-563-1208Product line : Capacitors for electric apparatus and power utilities, Capacitor-applied system and equipment ISO 9001 & ISO14001 certified 15-1, 2-chome, Kitakose-cho, Kameoka-shi, Kyoto, 621-0811, Japan.TEL.81-771-22-5541 FAX.81-771-24-1923Product line : Hybrid ICs, Positive thermistors ‘‘Posi-R’’, Switching power suppliesISO 9001 & ISO14001 certified4085 Toyoshina, Toyoshina-cho, Minamiazumi-gun, Nagano Pref., 399-8305, Japan.TEL.81-263-72-2830 FAX.81-263-72-7140Product line : Aluminum electrolytic capacitors (Large can type) ISO 9001, QS-9000 & ISO14001 certified 1284-2, Kitahodaka Hodaka-cho, Minamiazumi-gun, Nagano Pref., 399-8302, Japan.TEL.81-263-82-2510 FAX.81-263-82-7536Product line : Electrode foil for aluminum electrolytic capacitorsISO9001 & ISO14001 certified Yashiro, Ohmachi, Nagano Pref., 398-0003, Japan.TEL. 81-261-21-3200 FAX. 81-261-21-3206Product line : Electrode foils for aluminum electrolytic capacitors 1-11-2 Shimoyoro, Ono-shi, Fukui Pref., 912-0095, Japan.TEL.81-779-66-0333 FAX.81-779-66-0312Product line : Aluminum electrolytic capacitors (Miniature-sized type) ISO 9001, QS-9000 & ISO14001 certified Nichicon Technology Center, 4 Tsuchifugo, Ohno-shi, Fukui Pref., 912-0805, Japan.TEL. 81-779-65-8000 FAX. 81-779-65-8911Product line : Electrode foils for aluminum electrolytic capacitors ISO 9002 certified1372 Konan, Suwa-shi, Nagano Pref., 392-0131, Japan.TEL.81-266-52-1816 FAX.81-266-52-3369Product line : Plastic film capacitorsISO 9002 & ISO14001certified5-5, 2-Chome, Hamamatsu-cho, Minato-ku,Tokyo, 105-0013, Japan.TEL.81-3-3432-6561 FAX.81-3-3437-5769Product line : Development & design for switching power suppliesISO 9001 certified

KUSATSU FACTORY

KAMEOKA FACTORY

NAGANO FACTORY

HOTAKA FACTORY

OHMACHI FACTORY

OHNO FACTORY

TOMITA FACTORY

SUWA FACTORY

POWER SUPPLY DIVISION

Factories

Authorized number of sharesIssued number of sharesPar valueNumber of shareholdersListings

138,480,000 shares82,624,372 shares50 (yen)9,360First section, Tokyo Stock ExchangeFirst section, Osaka Securities ExchangeFirst section, Nagoya Stock Exchange

The Chase Manhattan Bank N.A. London S.L. Omnibus AccountNippon Life Insurance CompanyJapan Trustee Services Bank, Ltd. (Trust Account)State Street Bank and Trust CompanyBank of Kyoto, Ltd.The Fuji Bank, Ltd.The Sanwa Bank, Ltd.The Sakura Bank, Ltd.Kaichiro HiraiThe Mitsubishi Trust and Banking Corporation (Trust Account)

Major shareholdersNumber of shares held

Percentage of shares held

4,382,5004,238,6123,938,6003,906,5003,370,0003,090,0002,448,9892,391,9211,915,0111,817,600

5.30%5.13%4.77%4.73%4.08%3.74%2.96%2.89%2.32%2.20%

Common stock price range

＞＞�

Investor Information＞＞�

�

NICHICON CORPORATIONUehara Bldg., Oikedori, Karasumahigashi-iru, Nakagyo-ku, Kyoto, 604-0844, Japan.TEL.81-75-231-8461　FAX.81-75-256-4158

URL: http://www.nichicon.co.jp/ http://www.nichicon-us.com/

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