2001

Annual ReportProfile
Since its foundation in 1941, Nippon Shokubai has been engaged in R&D
activities in search of original technical solutions in four major fields: catalyst
technology, polymer synthesis, environment preservation systems, and organic
synthesis. Our major products are basic chemicals, including acrylic acid,methacrylic acid and ethylene oxide; fine and specialty chemicals, including
superabsorbent polymers and higher alcohols; synthetic resin, including unsaturated polyester resins; and catalysts/environment preservation systems, including catalysts for cleaning automobile exhaust gases, process catalysts anddioxins decomposition/elimination equipment. Created through our proprietary technology and know-how, these products have made various contributions to our society and people’s daily lives.
In addition, our various chemical product manufacturing technologies havebeen highly appreciated overseas, as well as our diverse line of products.
A wide variety of chemicals manufacturing technologies, including thoserelated to acrylic acid/esters and many other process technologies, have been
exported to Europe, Asia, the USA, and elsewhere.
In recent years, we have been making efforts to develop our business at
global basis by establishing production bases for acrylic acid and acrylic esters
in Southeast Asia and North America and for superabsorbent polymers inNorth America and Europe.
Under our corporate philosophy of “TechnoAmenity,” which seeks to harmonize “Technology” and “Natural Environment,” and focusing on our ultimate objective, “making human life richer and more comfortable throughtechnological innovations,” we are working to meet emerging global changes
and to enhance our potential for commercial competition.

Contents
Financial Highlights .................................................................................. 1
To Our Shareholders ................................................................................. 2
Business Plan ............................................................................................. 4
Review of Operations
Chemical Business ................................................................................. 6
Other Businesses .................................................................................... 8
Topics ........................................................................................................ 8
Responsible Care ....................................................................................... 9
Management Indices ............................................................................... 10
Financial Section
Independent Auditors’ Report .............................................................. 13
Consolidated Balance Sheets ............................................................... 14
Consolidated Statements of Income ..................................................... 16
Consolidated Statements of Shareholders’ Equity .............................. 17
Consolidated Statements of Cash Flows .............................................. 18
Notes to Consolidated Financial Statements ....................................... 20
Corporate Data ........................................................................................ 30

Financial Highlights
Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries
Year ended March 31

Millions of yen

Thousands of
U.S. dollars

2001

2000

1999

2001

For the YearNet Sales ........................................
Operating Income ..........................
Income before Income Taxes ........
Net Income ....................................

¥160,585
5,379
3,178
1,242

¥162,461
6,622
5,349
2,659

¥160,190
8,906
7,925
4,450

$1,296,085
43,41425,65010,024

At Year-End
Total Assets ...................................
Total Shareholders’ Equity ...........

¥230,468
117,340¥216,896
118,820¥231,081
114,658$1,860,113
947,054

Yen

Per Share Amounts
Net Income ....................................
Cash Dividends .............................

¥6.37
7.00

¥13.54
7.00

U.S. dollars¥22.61
7.00

$0.05
0.05

Foreign Exchange Rate: US$1.00 = ¥123.90

Net Sales (Billions of yen)

Net Income (Billions of yen)

Shareholders’ Equity(Billions of yen)

6

200

107.6

5.2

172
160 162

160

118.8

120

5

111.7

114.7

117.3

100
4.5

150
4

80

3

100

60

2.7

2

56

40
1.5

50

1.2
1

20

0

0
’97* ’98

’99

’00

’01

0
’97* ’98

’99

’00

’01

’97* ’98

’99

’00

’01

*The year 1997 covers only four months, from December 1, 1996, to March 31, 1997, since the company changed its fiscal year
and accounting period at the 84th annual general meeting of shareholders.

Nippon Shokubai Co., Ltd. 1

To Our Shareholders

Performance
In fiscal year 2000, which ended on
March 31, 2001, capital investment, thecurrent driving force in the Japanese economy,
remained firm. Personal consumption,
however, continued to show little sign of
genuine recovery, reflecting difficult
employment conditions, such as an
unemployment rate, which remained at a highrate. Moreover, the improvement in theJapanese economy ground to a halt in thewake of the slowdown in the U.S. economy,
and concern remained high over the future
direction of the economy.
In the chemical industry, domestic
demand was favorable during the fiscal year,
but the ballooning demand from Asian
economies reached a limit in the second halfof the fiscal year. The high prices of naphtha
and other raw materials placed negative
pressure on corporate profits, producing a lessthan rosy business climate.
Performance Highlights(Unit: millions of yen)

Fiscal Year

Change2000
1999
Amount%Net sales
160,585
162,461 (1,876)(1.2)
Operating income
5,379
6,622 (1,242)(18.8)
Ordinary income
4,303
5,088
(784)
(15.4)Net income
1,242
2,659 (1,417)(53.3)Net income per share¥6.37¥13.54(¥7.17)(52.9)ROE (Return on Equity)
1.1%
2.3%
—
(1.2 points)
ROA (Return on Assets)
1.9%
2.3%
—
(0.4 points)
Exchange rate$=¥110.60 $=¥111.62(¥1.02)
DM=51.36 DM=59.00(¥7.64)Naphtha price¥23,550/kl ¥17,950/kl¥5,600/kl

In this business environment,
consolidated net sales declined by ¥1,876
million (1.2%), to ¥160,585 million, due to adecrease in the sales volumes of core products
and appreciation in the yen.
Operating income declined by ¥1,242
million (18.8%), to ¥5,379 million. The
decline in operating income occurred despite
an upward revision in the prices of someproducts and cost reduction benefits fromrationalization because of a drop in actual
income received under the impact of the risingcost of raw materials and the appreciation in
the yen.

2 Nippon Shokubai Co., Ltd.

Although equity in losses of
unconsolidated subsidiaries and affiliates
declined as did bond interest paid, ordinary
income still declined by ¥784 million (15.4%),
to ¥4,303 million.
Consolidated net income declined by¥1,417 million (53.3%), to ¥1,242 million
because of the generation of a substantial
retirement benefits expense and the recordingof a loss on devaluation of investments insecurities.
Net income per share amounted to ¥6.37
while Return on Equity (ROE) was 1.1%,
down 1.2 points. Return on Assets (ROA) was
1.9%, down 0.4 points from the previous
fiscal year.
Sales by Business Group and Region(Unit: millions of yen)

Fiscal Year 2000 Fiscal Year 1999

ChangeBusiness Group Chemicals Others Chemicals Others Chemicals Others
Sales
158,230 2,355 159,907 2,554 (1,676) (199)
Operating income 4,738 505 5,681
808(942) (302)Japan Overseas Japan Overseas Japan Overseas
Regional
Sales
142,021 18,564 143,363 19,097 (1,342) (533)
Operating income 5,397(54) 5,399 1,119(1) (1,174)

Cash Flow
Cash and cash equivalents (“Net cash”) at
the end of the fiscal year under review
contracted by ¥8,021 million (35.1%), to¥14,806 million from the end of the previous
fiscal year. This decline was attributed to thelack of proceeds from sales of marketablesecurities and investments in securities asrecorded in the previous fiscal year, lower
income before income taxes and minority
interests, and lower depreciation.
Net cash provided by operating activities
Net cash provided by operating activities
amounted to ¥9,757 million. Although cash
flow decreased somewhat because of anincrease in inventories and other items, there
was an overall net increase in cash because of
cash flow of ¥3,178 million from income
before income taxes and minority interests anddepreciation and amortization of ¥10,088
million.

Net cash used in investing activities
Net cash used in investing activities
amounted to ¥12,961 million. These funds
were used for the acquisition of thesuperabsorbent polymer production facilities
of Nippon Shokubai Europe N.V., expenses
for other facilities, the purchase of marketablesecurities and investments in securities, andinvestments in overseas affiliated companies.
Net cash used in financing activities
Net cash used in financing activities
amounted to ¥6,584 million. These funds weremainly used to pay cash dividends toshareholders and to repay loans.

Dividend Policy
Nippon Shokubai considers shareholder
dividends as one of the top corporate
priorities, and our policy is to ensure a payoutof continuous, stable dividends to ourshareholders. At the same time, the Company
must maintain its competitive edge and follow
practices that promote sustainable growth, andthis requires judicious investment in facilities
and research and development. It is thus vitalthat we retain some of the profits within the
Company. Consequently, dividends are paid
continuously in the future in consideration ofmaintaining a balance between these two
factors.
Based on the current businessenvironment and the results in the fiscal year
under review, the Company has decided to
pay an annual dividend of ¥7.00 per share,including the ¥3.50 paid as an interim
dividend, which is equivalent to payout ratioof 53.7%.

Despite this difficult
business climate, ourplans call for consolidated
net sales increasing¥11,414 million (7.1%),
to ¥172.0 billion (¥83
billion in the first half)
due to an expected
recovery in the sales
volumes of some of ourcore products. Despite
continued pressure fromhigh raw material costs,
ordinary income isexpected to increase¥1,896 million (44.1%),
to ¥6.2 billion (¥1.8
Hiroshi Yanagida, President
billion in the first half) supported bycontinuous efforts to maintain appropriate
price levels and reduce operating costs. Net
income is expected to increase ¥2,057 million(165.6%), to ¥3.3 billion (¥800 million in thefirst half) compared with the previous fiscal
year in which the retirement benefits expenseand loss on devaluation of investments insecurities were booked.
Although we expect the yen exchange rate
to continue to fluctuate, we have principallyused the exchange rate of ¥115 to the U.S.
dollar in our calculations of the above outlook.
In addition, the price of naphtha, which sets
the standard for raw material prices, was set at¥23,000 per kiloliter.

Outlook for Fiscal Year 2001
The direction of the Japanese economy in
the current fiscal year is difficult to predict.
The U.S. economy has begun to slow andmovement in Asian economies is unclear.
Furthermore, there is growing concern overpossible economic recession in Japan due tosigns of falling capital investment by theprivate sector as well as other factors.

Hiroshi Yanagida
President

Nippon Shokubai Co., Ltd. 3

Business Plan

Fundamental Business Policies
Under our corporate philosophy of “TechnoAmenity—making human life richer and more
comfortable through technological innovations”, with the catalyst technology as a core, we areworking to meet emerging global changes and to enhance our potential for commercial
competition, based on the following fundamental business policies.
• Respect humanity.
• Target the development of pioneering technologies.
• Conduct business activities with a global view.

Our Business Plans
We believe that our highest priority is not the pursuit of continuous growth in quantity but
in quality, with recognizing our strengths and weakness and by selecting and focusing in theuse of our business resources. Based on an awareness of this priority, we have preparedmedium-term (3 years) and long-term (6 years) business plans that were implemented in April
2001.
Summary of the Long-term Business Plan, “TechnoAmenity NV”
1. Our future vision of the Company is “Nippon Shokubai: A Global Company Creating New
Values through Unique Technologies.” This statement is a “New Version” of our business
policy as guided by our corporate philosophy of “TechnoAmenity” and incorporate a “New
Vision” aimed at creating “New Value.”
2. Under our long-term business plan slogan, “A Shift from Quantitative Growth to Qualitative Growth—for Our Development in the 21st Century,” we are aiming to establish a
powerful business structure based on the following three business focuses.
• New products field “Selective and Focused Use of Business Resources—increasing the
precision and speed of new products development”.
■ Outline (Consolidated)■ ROA (Return on Assets)(Consolidated)

Unit:100 millions of yen
Net Sales / Total Assets

Ordinary Income

3,000

300

2,500
2,304

2,360

2,420

2,500

8.0 %

250

5.7%

6.0 %

2,000

1,830

2,000

200

140

150

Business Target 5%

1,720
1,605
1,500

4.0 %

Ordinary Margin(Percentage of Net Sales
for Ordinary Income)

3.8%

2.7➝7.0

2.7%
91

1,000

100

2.0 %

62
500

43

0
(FY) 2000

0.72➝0.81
Total Assets
Turnover

50

0
2001

2002

Net Sales
Total Assets
Ordinary Income

4 Nippon Shokubai Co., Ltd.

1.9%

2003

0.0 %
(FY) 2000

2001

2002

2003

• Existing products field “Establishing a Business Portfolio and Clarifying Responsibility ofProfit Making”.
• Revitalizing employees and its organization “Creating a Vigorous and Flexible Corporate
Organization that Can Respond Quickly to Change of The Times”
3. Performance Indicator
Targeting more efficient use of assets, we have introduced Return on Assets (ROA) on aconsolidated basis as our indicator of overall corporate performance. As performanceindicators for business operations, we have introduced cash flow provided by operating
activities and sales contribution income (our own, original indicator), targeting increased
product profitability.
Summary of the Medium-term Business Plan
The first three years of the long-term business plan, has been termed the “foundation
setting” stage of the plan, and we have implemented planning of concrete measures to achieve
its goals.
Supported by the stable cash flow generated by our core businesses of acrylic acid andsuperabsorbent polymers, we plan to further strengthen our new products development organization, and make a leap in the fine & specialty chemicals business. In addition, we intend to
firm up our base in the environment business under an expanding of the market due to therecent enforcement of environmental regulations.
Our goal is to achieve an ROA of 5% or greater on a consolidated basis at the end of thethree years, representing improved efficiency in use of assets and the strengthening of ourcorporate structure.

■ Net Sales by Segments (Consolidated)
Unit:100 millions of yen
2000
23
1605

1720
23

23
1500

286

1830
23

387
(24.0%)

260(5.3%)

223

224

OthersEnvironment
Business & Catalysts

335

203
242

150 (+97)
7160(7.6%)

2000■ Operating Income by Segments
Unit:100 millions of yen(Consolidated)

Polymers &Resins

140
31
105
6

120

8

85

100

5

25

Others(+1)
Environment
Business & Catalysts(+25)
Polymers &Resins
(+9)

80

1000
607

637

650

730
(6.3%)

Fine &
Specialty
Chemicals

53
60

17

7

5

40

6
6
-1

20

43

102

Fine &
Specialty Chemicals(+59)

Basic Chemicals
(+3)

65
58

500
547

550

580

600
(3.1%)

0(FY) 2000

2001

2002

Basic Chemicals

2003

0

-1

0

2

2

(FY) 2000

2001

2002

2003

-20

Note:Estimated amounts of increase/decrease in
fiscal 2000 through fiscal 2003
Note: The figures are our targets for fiscal 2001 through fiscal 2003
Nippon Shokubai Co., Ltd. 5

Review of Operations(Chemical Business)

Chemical Business(Change of net sales)(100 millions of yen)

2000

1,691
1,599
1,582
1,577
1500

1000

500

554

0
’97 ’98 ’99 ’00 ’01

Breakdown andcomponent ratio in
2001:(100 millions of yen)asic
hemicals
roup

47
4.6%

Breakdown andcomponent ratio in
2001:(100 millions of yen)

ine andpecialty
hemicals
roup

07
8.4%

Basic Chemicals Group
Sales of acrylic acid and acrylic esters increased
because of a recovery in prices in international markets
and continued firm demand for use in superabsorbent
polymers. Sales of methacrylic acid and methacrylic
esters also increased from continued firm demand and arecovery in prices in international markets.
Although prices in international markets improved for
ethylene glycols, unrecovered domestic demandand intensified competition in overseas markets
pushed down sales volume. Sales of ethyleneoxide and its derivatives declined due to stagnant
domestic demand.
Despite an upward revision of prices, sales ofphthalic anhydride declined because of continued
stagnant demand for its use in plasticizers andpaint. While, sales of maleic anhydride increased
supported by a sudden recovery in international
prices and by firm progress of exports.

Chemicals Production Plant*Automotive Paints (Acrylic esters andmethacrylic esters)
Consequently, sales of the Basic Chemicals
Group totaled ¥54,703 million, up 2.1% from the previous fiscal year.

Fine & Specialty Chemicals Group
Sales of superabsorbent polymers declined because of falling of sales volumes
caused by excessive competition globally and because of the appreciation in theyen, especially against the euro.
Sales of higher-alcohol products (SOFTANOL) and other raw materials fordetergents declined because of stagnant domestic demand and intensifying competition in overseas markets.
Although construction investment remained in a slump, domestic and export
sales of products used as concrete admixtures increased thanks to a strong reputation in the market for their high functions.
Sales of iodic and cyanic compounds and agricultural chemical-related products
fell because of intensified competition.
Regarding other fine & specialty chemicals, sales of medical intermediates
suffered from intensified competition in overseas markets, but sales of raw materials
for resins and for information-related products was firm, resulting in an increase insales of other fine & specialty chemicals.
Consequently,
sales of the Fine
& Specialty
Chemicals Group
totaled ¥60,761
million, down
5.7% from theprevious fiscal
year.

*LCD displays (EPOSTAR)*Polymers for concrete admixture (AQUALOC)

6 Nippon Shokubai Co., Ltd.

Breakdown andcomponent ratio in
2001:(100 millions of yen)23
4.1%
olymersnd Resins
roup

Polymers & Resins Group
Sales of unsaturated polyester resin (EPOLAC)
for use in housing construction and industrial
machinery and equipment were weak, but the sales
were approximately the same as in the previous
year by an upward revision in prices ofsome products.
Despite sales of resins for use in ultraweather resistant paints and for adhesives
being favorable, sales of heat resisting
paints declined because of intensifiedcompetition in overseas markets.
In addition, sales of plastic molded
products declined due to stagnant demand.
Consequently, sales of the Polymers &Resins Group totaled ¥22,377 million,
down 7.0% from the previous fiscal year.

*Bath Room (EPOLAC)*Resins for Paints (UWR)

Environment Business & Catalysts Group
Breakdown andcomponent ratio in
2001:(100 millions of yen)

03
2.8%

nvironment
usiness andatalysts Group

Sales of process catelysts relating technology licensing declined because of
weak replacement demand.
Sales of De-NOx catalysts declined because of lower demand from electric
power plants. While, sales of automotive catalysts increased due to greater demand
resulting from more stringent regulations on exhaust emissions.
Sales of dioxin decomposition systems and wastewater treatment systems werefavorable and increased.
Consequently, sales of the Environment Business & Catalysts Group totaled¥20,387 million, up 14.3% from the previous fiscal year.

Catalytic Dioxins Decomposition System
Exhaust gas treatment catalysts

Overall, total sales of the Chemicals Business declined by ¥1,676 million (1.0%),
to ¥158,230 million from the previous fiscal year.
Operating income declined by ¥942 million (16.6%), to ¥4,738 million. Thisdecline occurred, despite efforts to an upward revision in the prices of products anda reduction of fixed expenses, because of the negative impact of falling of sales
volumes, the appreciation in the yen, and a sharp rise in cost of raw materials.
*Examples of end uses for Nippon Shokubai products. The raw material in parentheses is the Nippon shokubai product.

Nippon Shokubai Co., Ltd. 7

Review of Operations(Other Businesses)

Other Businesses(Change of net sales)(100 millions of yen)

30
27
25

25

26
23

20

Revenues from the transportation businessdeclined because of a drop in haulage volume,
while services revenues also declined because of
the weak economy and the diversification in theleisure preferences of Japanese.
Overall, total sales of the Other Businesses
declined by ¥199 million (7.8%), to ¥2,355 million
from the previous fiscal year.

15
10

9

Operating income declined by ¥302 million (37.4%), to ¥505 million despite cost
reduction efforts because of an increase in the cost of fuel for transportation vesseles.

’97 ’98 ’99 ’00 ’01

Geographic Information
Japan

5
0

The chemicals business was slow generally slow throughout the fiscal year underreview. Sales totaled ¥142,021 million, and operating income was approximately thesame as in the previous fiscal year, at ¥5,397 million.

Overseas
Overseas performance suffered from intensified competition during the fiscal year
under review. Sales totaled ¥18,564 million, down 2.8%, and operating income
moved into the red, at ¥54 million.

TopicsAmerican Acryl Building Acrylic Acid Plant
On September 26, 2000, American Acryl LP. held a groundbreaking ceremony
for its acrylic acid plant in the Bayport industrial district of Pasadena, Texas. American Acryl is a 50/50 joint venture of NA Industries, Ltd., a U.S. subsidiary of
Nippon Shokubai, and ATOFINA Chemicals, Inc.
NA Industries, Nippon Shokubai’s manufacturing base in North America
for superabsorbent polymers, got involved in this project to acquire a stablesupply of high-quality, low-cost acrylic acid. NA Industries and ATOFINA
Chemicals plan to build an acrylic acid plant with an annual production
capacity of 120 thousand metric tons. Construction is ongoing with operations scheduled to start in the first half of 2002.
Acrylic acid and superabsorbent polymers are core businesses for
Nippon Shokubai, and the Company is developing these businesses inJapan, the United States, and Asia. The Nippon Shokubai Group currently
produces acrylic acid at Nippon Shokubai’s
Himeji Plant (annual production capacity of
220 thousand metric tons) and at its subsidiary,
P.T. Nippon Shokubai Indonesia (60 thousand
metric tons). When the new plant comes on
stream, N.A. Industries’ share of production
will be 60 thousand metric tons, bringing theGroup’s total annual production capacity to 340
thousand metric tons.

8 Nippon Shokubai Co., Ltd.

Nippon Shokubai’s Fundamental Policy
Regarding Environmental Preservation and Safety
As a member of the business commuSpecific Responsible Carenity and society at large, we are committed
Activities
to be a good corporate citizen not only of
local communities also of the world. In
our activities, we place great emphasis
Societyon the environmental preservation,
Process
Communications
safety andhealth and safety throughout theDisasterPrevention
entire life cycle of chemical
substances, from development toEnvironOccupamental
disposal. Based on the principle
tionalPreservation
safety andFive themes of activities
of sustainable development, ourhealth● Environmental preservation
fundamental policy is to harmoProduct● Process safety and disaster prestewardshipnize our activities with environvention● Occupational safety and healthmental preservation on a global● Product stewardshipbasis.
● Communication (Publication of
performance, dialogue with the
public)Environmental Preservation and
Safety Activities
Nippon Shokubai is a participant in the
Responsible Care activities of the International Council of Chemical Associations(ICCA). Through these RC activities, theCompany is contributing to the environmental preservation.

RC Participation History
1993 Established fundamental policy andcommitted to the pursuit of RC.
1995 The Japan Responsible CareCouncil (JRCC) was established,with 74 companies participating.
* As of 2001, 109 companies are participating in the
JRCC.

RC (Responsible Care)
Major Activities on environmental
preservation(1) Pollutant Release and Transfer Register(PRTR)(2) Promotion of energy conservation(3) Reduction of industrial waste(4) Material Safety Data Sheet (MSDS)
preparation and distribution to customers(5) Yellow Card preparation(6) Environmental management system(ISO14001 certification)(7) Participation in regional RC meetingssponsored by the JRCC
(8) Participation in the ICCA’s initiative onhigh production volume (HPV)(9) Participation in the ICCA’s long-range
research initiative (LRI)

Activities undertaken by the chemicalindustry by which manufactures andhandlers of chemical substances, under the
principle of self-determination and individual responsibility, conduct self-management of environmental and safetyissues surrounding aspects of chemical
substances, from development to disposal.

(1) PRTR (Pollutant Release andTransfer Register)
PRTR protocols comprise asystem for calculating andrecording the degree to which
chemical substances aredischarged into the environment
during production, use, andstorage, voluntarily commenced
by the JCIA (Japan Chemical
Industry Association) in 1995. In
July 1999, “Law Concerning
Reporting, etc. of Release ofSpecific Chemical Substances tothe Environment and Promotionof the Improvement of Their
Management” was promulgatedand will be applied to businesses
that manufacture or handle
specified chemical substances
beginning in 2001.
(4) MSDS (Material Safety Data
Sheet)A safety data sheet provided foreach product by chemical
product suppliers to uses andhandles for the purpose of
preventing chemical productrelated accidents.
(5) Yellow Card
A card stating the procedures tobe taken and contact information
for transporters, fire squads, andpolice in the event of an accident
during the road transport ofchemical substances.
(8) HPV(High Production
Volume)Preexisting Chemical
Substances
An OECD program forcollecting and evaluating safety
data on chemical substances
whose production volume
exceeds 1,000 tons per country.
(9) LRI (Long-range ResearchInstitute)
A voluntary long-term plan to
study the effects of chemical
substances on health, safety, andthe environment, one of ICCA’s
most crucial agendas.
(7) JRCC (Japan Responsible
Care Council)
An organization establishedwithin JCIA in 1995 for thepromotion of RC in Japan.
(9) ICCA (International Councilof Chemical Associations)
A gathering of the world’s
chemical industry groups, which,as of its establishment in 1990,
has included the Japan Chemical
Industry Association.

Nippon Shokubai Co., Ltd.

9

Management Indices(1) Consolidated Management Indices
PeriodFiscal Year End

84thNovember
1996

85th
March
1997

86th
March
1998

87th
March
1999

88th
March
2000

89th
March
2001
(Millions of yen)

Net Sales
Ordinary Income
Net Income
Net Assets
Total Assets

158,460
10,0785,488
106,872
206,459

56,272
3,392
1,533
107,625
206,748

171,805
11,222
5,226
111,673
218,953

160,190
8,231
4,450
114,658
231,081

162,461
5,088
2,659
118,820
216,896

160,585
4,303
1,242
117,340
230,468(yen)

Net Assets per ShareNet Income per Share
Fully Diluted Net Income per Share
Capital Ratio (%)
Return on Equity (%)
Price Earning Ratio (times)

542.8327.88—

546.66
7.79—

567.21
26.54—

582.3922.61—

609.72
13.54—

602.11
6.37
—

51.8
5.2
31.2

52.1
4.3
31.6

51.0
4.8
28.0

49.6
3.9
29.7

54.8
2.3
33.2

50.9
1.1
70.6
(Millions of yen)

Cash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Cash and Cash Equivalents at Year-end

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
23,76718,285(5,709)(13,463)
22,827

9,757(12,961)(6,584)
14,806

Number of Employees

—

—

—

—

3,050

3,189

Note 1: Net Sales do not include consumption taxes.
Note 2: Fully Diluted Net Income per Share is not recorded because bonds with warrants attached and convertible bonds are not issued.
Note 3: The 85th period was 4 months, from December 1, 1996 through March 31, 1997, owing to the fact that the balance sheet date was changed toMarch 31. Return on Equity and Price Earning Ratio are on an annualized basis.

10 Nippon Shokubai Co., Ltd.

(2) Non-consolidated Management Indices
PeriodFiscal Year End

84thNovember
1996

85th
March
1997

86th
March
1998

87th
March
1999

88th
March
2000

89th
March
2001
(Millions of yen)

Net Sales
Ordinary Income
Net Income
Capital135,006
9,169
5,319
16,52946,782
2,954
1,394
16,529141,755
9,146
5,546
16,529128,998
6,870
4,115
16,529128,086
4,616
3,097
16,529129,712
5,205
2,539
16,529Issued and Outstanding Shares(Thousands shares)

196,881

196,881

196,881

196,881

194,881

194,881(Millions of yen)

Net Assets
Total Assets

101,115
184,303

101,743
183,600

106,113
193,178

109,533
203,537

113,470
189,999

114,568
189,236(yen)

Net Assets per ShareDividend per Share(Interim Dividend per Share)
Net Income per Share
Fully Diluted Net Income per Share

513.597.00(3.50)
27.02—

516.78
2.35
(—)
7.08
—

538.977.00(3.50)
28.17—

556.347.00(3.50)
20.90—

582.257.00(3.50)
15.77—

587.897.00(3.50)
13.03—

Capital Ratio (%)
Return on Equity (%)
Price Earning Ratio (times)
Dividend Payout Ratio (%)
Number of Employees

54.9
5.4
32.2
25.9
2,214

55.4
4.1
34.8
33.2
2,190

54.9
5.3
26.4
24.8
2,217

53.8
3.8
32.1
33.5
2,258

59.7
2.8
28.5
44.3
2,127

60.5
2.2
34.5
53.7
2,004

Note 1: Net Sales do not include consumption taxes.
Note 2: Fully Diluted Net Income per Share is not recorded because bonds with warrants attached and convertible bonds are not issued.
Note 3: The 85th period was 4 months, from December 1, 1996 through March 31, 1997, owing to the fact that the balance sheet date was changed toMarch 31 at the shareholders’ meeting on February 27, 1997. Therefore, the Company waived an interim dividend for the period. Return on
Equity and Price Earning Ratio are on an annualized basis.
Note 4: Issued and Outstanding Shares are 2,000 thousands less than in the previous year, owing to the retirement of treasury stock out of profit.
Note 5: Number of Employees will be the representation of the number of people actually engaged in work from the 88th period onward.

Nippon Shokubai Co., Ltd. 11

Financial Section

Independent Auditors’ Report ................................................. 13
Consolidated Balance Sheets .................................................. 14
Consolidated Statements of Income........................................ 16
Consolidated Statements of Shareholders’ Equity ................. 17
Consolidated Statements of Cash Flows ................................. 18
Notes to Consolidated Financial Statements .......................... 20

12 Nippon Shokubai Co., Ltd.

Independent Auditors’ Report

The Board of Directors and the Shareholders
Nippon Shokubai Co., Ltd.

We have audited the consolidated balance sheets of Nippon Shokubai Co., Ltd. and 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 yen. Our audits weremade in accordance with auditing standards, procedures and practices generally accepted andapplied in Japan and, accordingly, included such tests of the accounting records and such otherauditing procedures as we considered necessary in the circumstances.
In our opinion, the accompanying consolidated financial statements, expressed in yen, present
fairly the consolidated financial position of Nippon Shokubai Co., Ltd. and consolidated subsidiaries at 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 acceptedin Japan consistently applied during the period except for the changes, with which we concur, in themethods of accounting for securities and inventories as described in Note 3.
As described in Note 1, Nippon Shokubai Co., Ltd. and consolidated subsidiaries have adopted
new accounting standards for foreign currency translation, financial instruments, and employees’
retirement benefits effective April 1, 2000, and new accounting standards for research and development costs and tax-effect accounting effective April 1, 1999 in the preparation of their consolidated
financial statements.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2001 are presented solely for convenience. Our audit also included thetranslation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 2.

Osaka, Japan
June 26, 2001

See Note 1(a) which explains the basis of presentation of the consolidated financial statements of
Nippon Shokubai Co., Ltd. under Japanese accounting principles and practices.

Nippon Shokubai Co., Ltd. 13

Consolidated Balance Sheets
Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

2001

March 31,
2000

2001
(Thousands of
U.S. dollars)( Note 2)(Millions of yen)

AssetsCurrent assets:
Cash and cash equivalents .......................................................
Time deposits (Note 7).............................................................
Short-term investments (Note 5)..............................................
Notes and accounts receivable:
Unconsolidated subsidiaries and affiliates ...........................
Trade .....................................................................................
Allowance for doubtful receivables ......................................
Inventories (Note 6) .................................................................
Deferred income taxes (Note 9) ...............................................
Other current assets ..................................................................

¥14,806331
11¥22,827362
22$119,500
2,672
89

6,480
44,119(196)
29,846
2,105
3,265

4,508
41,524(259)
24,4081,713
2,528

52,300356,086(1,582)
240,888
16,99026,350Total current assets .....................................................................

100,767

97,633

813,293

Property, plant and equipment (Note 7):
Land ..........................................................................................
Buildings and structures ...........................................................
Machinery and equipment ........................................................
Construction in progress ..........................................................
Accumulated depreciation........................................................

28,47358,995
209,404
6,682(207,780)

26,991
57,937
194,006
109(195,602)

229,806
476,150
1,690,105
53,931(1,676,998)

Property, plant and equipment, net ............................................

95,774

83,441

772,994

Investments and other assets:
Investments in securities (Notes 5 and 7) ................................
Investments in and advances to unconsolidated
subsidiaries and affiliates ..................................................
Deferred income taxes (Note 9) ...............................................
Other assets ..............................................................................

13,802

12,799111,396

10,415
3,692
6,018

13,6003,096
4,640

84,06029,79848,572

Total investments and other assets .............................................

33,927

34,135

273,826

Translation adjustments .............................................................

—

1,687

—

Total assets .................................................................................

¥ 230,468¥ 216,896$1,860,113

14 Nippon Shokubai Co., Ltd.

2001

March 31,
2000

2001
(Thousands of
U.S. dollars)( Note 2)(Millions of yen)

Liabilities and shareholders’ equity
Current liabilities:
Short-term bank loans (Note 7)................................................
Current portion of long-term debt (Note 7) .............................
Notes and accounts payable:
Unconsolidated subsidiaries and affiliates ...........................
Trade .....................................................................................
Construction ..........................................................................
Accrued income taxes (Note 9) ................................................
Other current liabilities ............................................................
Total current liabilities ...............................................................

¥9,251
9,186¥12,928
5,520$74,665
74,1403,715
29,890
1,377
1,619
7,213
62,251

4,763
22,261
1,184
1,514
7,808
55,97829,984
241,243
11,114
13,06758,216502,429

38,004
9,022

29,741
9,617

306,731
72,817601
758
228
48,613755
8
16440,285

4,850
6,118
1,841
392,357

2,264

1,813

18,273

Shareholders’ equity:
Common stock, ¥50 par value:
Authorized – 424,000,000 shares:
Issued – 194,881,287 shares in 2001;
194,881,287 shares in 2000 ....................................
Additional paid-in capital ........................................................
Retained earnings (Note 10) ....................................................
Translation adjustments ...........................................................
Less treasury stock, at cost.......................................................
Total shareholders’ equity ..........................................................

16,52913,562
88,168(919)(0)
117,340

16,52913,562
88,731—(2)
118,820

133,406
109,459
711,606(7,417)(0)
947,054

Total liabilities and shareholders’ equity ...................................

¥230,468¥216,896$1,860,113

Long-term liabilities:
Long-term debt (Note 7) ..........................................................
Accrued retirement benefits for employees (Note 8) ..............
Accrued retirement benefits for directors andcorporate auditors .................................................................
Deferred income taxes (Note 9) ...............................................
Other .........................................................................................
Total long-term liabilities ...........................................................
Minority interests .......................................................................
Contingent liabilities (Note 13)

See accompanying notes to consolidated financial statements.

Nippon Shokubai Co., Ltd. 15

Consolidated Statements of Income
Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2000

2001

2001
(Thousands of
U.S. dollars)( Note 2)(Millions of yen)

Net sales (Note 16) .....................................................................
Cost of sales (Note 11) ...............................................................

¥160,585
126,568¥162,461
125,753$1,296,085
1,021,533

Gross profit ...........................................................................

34,01736,708274,552

Selling, general and administrative expenses (Note 11) ............

28,63830,086

231,138

Operating income (Note 16) .................................................

5,379

6,622

43,414

583
(906)
12
748
(588)

532
(1,212)
886
673
(208)

4,705
(7,312)
97
6,037(4,746)(1,308)305(1,372)—(10,557)
2,462(3,813)—(30,775)

3,233
(467)

—
(572)

26,094(3,769)

3,178

5,349

25,650

2,531
(746)

2,858
(402)

20,428(6,021)

1,785

2,456

14,407

Income before minority interests ..........................................

1,393

2,893

11,243

Minority interests in earnings of consolidated subsidiaries.......

(151)

(234)

(1,219)Net income (Note 14) ...........................................................

¥1,242¥2,659$10,024

Other income (expenses):
Interest and dividend income ................................................
Interest expense .....................................................................
Gain on sales of investments in securities ............................
Royalty income .....................................................................
Loss on devaluation of investments in securities .................
Equity in losses of unconsolidated
subsidiaries and affiliates ...............................................
Gain on sales of property, plant and equipment ...................
Amortization of the net retirement benefit obligation
at transition .....................................................................
Gain on marketable securities for
employees’ retirement benefit trust ................................
Other, net ...............................................................................
Income before income taxes and minority interests ..........
Income taxes (Note 9):
Current ......................................................................................
Deferred ....................................................................................

See accompanying notes to consolidated financial statements.

16 Nippon Shokubai Co., Ltd.

Consolidated Statements of Shareholders’ Equity
Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2000

2001

2001
(Thousands of
U.S. dollars)( Note 2)(Millions of yen)

Common stock:
Balance at beginning and end of year ......................................

¥16,529¥16,529$133,406

Additional paid-in capital:
Balance at beginning and end of year ......................................

¥13,562¥13,562$109,459¥88,731—
1,242(1,366)(87)¥84,5694,202
2,659(1,378)(88)$716,150—
10,024(11,025)
(702)

—

63

—

9

—

73

1,821

—

14,697

—

(225)

—

(2,182)—(17,611)

—
—

(90)
(981)

—
—

Balance at end of year ................................................................

¥88,168¥88,731$711,606

Translation adjustments:
Balance at beginning of year ....................................................
Net change during the year ......................................................

¥

—
(919)

¥

—
—

$

¥(919)¥—$ (7,417)

Retained earnings:
Balance at beginning of year ....................................................
Prior year’s adjustment for deferred income taxes ..................
Net income ...............................................................................
Cash dividends .........................................................................
Bonuses to directors and corporate auditors ............................
Increase in retained earnings resulting from
inclusion of consolidated subsidiaries ..................................
Increase in retained earnings resulting frommerger of an unconsolidated subsidiary ...............................
Increase in retained earnings resulting fromexclusion of companies accounted forby the equity method.............................................................
Decrease in retained earnings resulting fromexclusion of consolidated subsidiaries .................................
Decrease in retained earnings resulting from
inclusion of consolidated subsidiaries ..................................
Decrease in retained earnings resulting fromaddition of companies accounted forby the equity method.............................................................
Retirement of treasury stock ....................................................

Balance at end of year ................................................................

—(7,417)

See accompanying notes to consolidated financial statements.

Nippon Shokubai Co., Ltd. 17

Consolidated Statements of Cash Flows
Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries

Year ended March 31,
2000

2001

(Millions of yen)

Operating activities:
Income before income taxes and minority interests .....................
Adjustments to reconcile income before income taxes andminority interests to net cash provided by operating activities:
Depreciation and amortization ............................................
Reversal of retirement allowances ......................................
Interest and dividend income ..............................................
Interest expense ...................................................................
Equity in losses of unconsolidated subsidiaries
and affiliates ..................................................................
Decrease in investments in securities in trust .....................
Gain on sale of investments in securities ............................
Loss on devaluation of investments in securities ................
Loss on disposal of property, plant and equipment ............
Other, net .............................................................................
Changes in operating assets and liabilities:
Notes and accounts receivable ......................................
Inventories .....................................................................
Other current assets .......................................................
Notes and accounts payable ..........................................
Other current liabilities .................................................
Subtotal ....................................................................
Interest and dividends received .....................................................
Interest paid ...................................................................................
Income taxes paid ..........................................................................
Net cash provided by operating activities .....................................
Investing activities:
Decrease in time deposits ..............................................................
Purchases of shares of a subsidiary ...............................................
Proceeds from sales of short-term investments andinvestments in securities ...........................................................
Purchases of marketable securities and investments
in securities ...............................................................................
Purchases of property, plant and equipment .................................
Proceeds from sales of property, plant and equipment .................
Increase in loans receivable ..........................................................
Collection of loans receivable .......................................................
Other, net .......................................................................................
Net cash used in investing activities .............................................

18 Nippon Shokubai Co., Ltd.

2001
(Thousands of
U.S. dollars)(Note 2)

¥3,178¥ 5,349$ 25,650

10,088(1,371)(583)
906

12,475
(504)
(532)
1,212

81,421(11,065)(4,705)
7,312

1,308
424
(12)
588
70
(793)

1,372
—
(862)
208
236
454

10,557
3,422
(97)
4,746
565
(6,400)(2,975)(4,132)
—
5,876
(664)
11,908632(898)(1,885)
9,757

839
2,893
1,013
(3,210)702
21,645532(1,358)(2,534)
18,285(24,011)(33,349)—
47,425(5,361)
96,1105,100(7,247)(15,214)78,749—(1,679)3,199——(13,551)

41

6,774

331

(4,270)(7,484)
339
(326)
466
(48)
(12,961)(4,665)(9,971)
—
(629)
206
(624)
(5,710)(34,463)(60,404)
2,736(2,631)
3,761(387)(104,608)

Year ended March 31,
2000

2001

(Thousands of
U.S. dollars)(Note 2)

(Millions of yen)

Financing activities:
Decrease in short-term bank loans, net .........................................
Proceeds from long-term debt .......................................................
Repayment of long-term debt .......................................................
Purchases of treasury stock ...........................................................
Cash dividends paid ......................................................................
Other, net .......................................................................................
Net cash used in financing activities ............................
Effect of exchange rate changes on cash and cash equivalents ....
Decrease in cash and cash equivalents ..........................................
Cash and cash equivalents at beginning of year ...........................
Increase in cash and cash equivalents resulting from mergerof an unconsolidated subsidiary................................................
Increase (decrease) in cash and cash equivalents resulting
from change in number of consolidated subsidiaries ...............
Cash and cash equivalents at end of year ......................................

2001¥(3,701)
4,030(5,641)—(1,364)92(6,584)¥(1,259)
6,070(15,901)(981)(1,378)(15)(13,464)$(29,871)
32,526(45,529)—(11,009)743(53,140)

195(9,593)
22,82777(812)
23,767

1,574(77,425)
184,237

9

—

73

1,563
¥ 14,806(128)¥ 22,827

12,615$ 119,500

See accompanying notes to consolidated financial statements.

Nippon Shokubai Co., Ltd. 19

Notes to Consolidated Financial Statements
Nippon Shokubai Co., Ltd. and Consolidated Subsidiaries
March 31, 2001

1. Summary of Significant Accounting Policies
(a)

(c)

Foreign Currency Translation
The financial statements of the foreign consolidated subsidiaries are translated into yen at the rates
of exchange in effect at the balance sheet date exceptthat the components of shareholders’ equity aretranslated at their historical exchange rates. Translation differences resulting from translating thefinancial statements of the foreign consolidated
subsidiaries are not included in the determination of
net income and are reported as translation adjustments in a separate component of shareholders’equity and minority interests in the consolidatedbalance sheets at March 31, 2001. Such adjustments
were reported in the assets section at March 31,
2000.
Revenue and expense items arising from transactions denominated in foreign currencies are generally translated into yen at the rates in effect at therespective transaction dates.
Effective April 1, 2000, the Company and its
consolidated subsidiaries adopted a revised “Accounting Standard for Foreign Currency Translations” which was issued by the Business Accounting
Deliberation Council of Japan. Under this standard,
all monetary assets and liabilities denominated inforeign currencies are translated into yen at the rates
of exchange in effect at the balance sheet date,
except that receivables and payables hedged byqualified forward foreign exchange contracts aretranslated at the corresponding forward exchange
contract rates. Gain or loss on each translation iscredited or charged to income. The effect of the
adoption of this standard on the consolidated statements of operations for the year ended March 31,
2001 was immaterial.

(d)Cash and Cash Equivalents
For the purposes of the consolidated statement ofcash flows for the year ended March 31, 2001, cash
and cash equivalents include cash on hand and inbanks and other highly liquid investments withmaturities of three months or less when purchased.

(e)Inventories
Inventories of the Company and its consolidated
subsidiaries are stated principally at the lower ofcost or market, cost being determined by the moving
average method.

(f)

Property, Plant and Equipment
Property, plant and equipment is stated on theBasis of Presentation
Nippon Shokubai Co., Ltd. (the “Company”) and
its domestic consolidated subsidiaries maintain theiraccounts and records in accordance with accounting
principles and practices generally accepted andapplied in Japan. Its foreign subsidiaries maintaintheir accounts in conformity with the requirementsof their countries of domicile. The accompanying
consolidated financial statements have been compiled from the consolidated financial statements
prepared by the Company as required by the Securities and Exchange Law of Japan, which may differ
in certain material respects from accounting principles and practices generally accepted in countries
and jurisdictions other than Japan.
Certain reclassifications of previously reported
amounts have been made to conform the consolidated financial statements for the year ended March
31, 2000 to the 2001 presentation. Such reclassifications had no effect on consolidated net income orshareholders’ equity.

(b)Basis of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its
significant subsidiaries. All significant intercompany items have been eliminated in consolidation.
The foreign consolidated subsidiaries are consolidated on the basis of fiscal periods ending December
31, which differs from the balance sheet date of theCompany. As a result, adjustments have been madefor any significant intercompany transactions which
took place during the period between the year endsof these foreign consolidated subsidiaries and theyear end of the Company.
Investments in an unconsolidated subsidiary andsignificant affiliates are stated at cost plus equity intheir undistributed earnings or losses. Consolidated
net income includes the Company’s equity in thecurrent net income or losses of such companies, after
the elimination of unrealized intercompany profits.
Investments in unconsolidated subsidiaries andaffiliates not accounted for by the equity method are
carried at cost.
The excess of cost over underlying net assets atthe date of acquisition is amortized over a period offive years on a straight-line basis, except thatimmaterial amounts are charged to income as
incurred.

20 Nippon Shokubai Co., Ltd.

basis of cost. Depreciation is computed principallyby the declining-balance method over the estimateduseful lives of the respective assets, except that theforeign consolidated subsidiaries compute depreciation by the straight-line method over the estimateduseful lives of the respective assets.
(g)

(h)

LeasesNon-cancelable leases of the Company and its
domestic consolidated subsidiaries are accounted for
as operating leases (whether such leases are classified as operating or finance leases), except thatleases which stipulate the transfer of ownership ofthe leased assets to the lessee are accounted for as
finance leases. However, leases of the foreign
consolidated subsidiaries are generally classified andaccounted for as either finance or operating leases.
Short-Term Investments and Investments in
Securities
Effective April 1, 2000, the Company and its
domestic consolidated subsidiaries adopted “Accounting Standards for Financial Instruments,”
which was issued by the Business Accounting
Deliberation Council of Japan. This standard
requires that securities be classified into three
categories: trading securities, held-to-maturity debt
securities or other securities.
Under this standard, trading securities, consistingof debt and marketable equity securities, are stated atfair value. Gain and loss, both realized and unrealized, are charged to income. Held-to-maturity debt
securities are stated at amortized cost. Other securities are carried at cost determined by the moving
average method. Effective April 1, 2001, marketable securities classified as other securities are
required to be carried at fair value, with any changes
in unrealized holding gain or loss, net of the applicable income taxes, to be reported as a separate
component of shareholders’ equity.
As of April 1, 2000, the Company and its domestic consolidated subsidiaries assessed their intent tohold their short-term investments and investments insecurities, classified their securities at March 31,
2001 as “held-to-maturity debt securities” or “othersecurities” and in accordance with the new standard
referred to above. As a result, short-term investments of ¥8 million ($65 thousand), which had been
included in short-term investments at March 31,
2000, have been reclassified to investments insecurities effective April 1, 2000.

(i)

Research and Development Costs and Computer Software
Research and development costs are charged toincome when incurred. Expenditures relating to thedevelopment of computer software intended forinternal use are charged to income as incurred, except
if these are deemed to contribute to the generation of
future income or cost savings. Such expenditures arecapitalized as assets and amortized by the straightline method over their useful lives, generally a periodof 5 years. “Accounting Standards for Research andDevelopment Costs, etc.” which was issued by theBusiness Accounting Deliberation Council of Japan
has been adopted effective April 1, 1999.

(j)Income Taxes
Income taxes are calculated based on taxable
income and charged to income on an accrual basis.
Certain temporary differences exist between taxable
income and income reported for financial statement
purposes which enter into the determination of
taxable income in a different period. Effective April
1, 1999, the Company initially adopted “Financial
Accounting Standard on Accounting for Effects on
Income Taxes” which was issued by BusinessAccounting Deliberation Council of Japan andrecognized the tax effect of temporary differences in
its consolidated financial statements. The cumulative effect of this adoption of tax-effect accounting
through the beginning of the prior year was reported
as prior year’s adjustment for deferred income taxes
in the consolidated statements of shareholders’ equity
for the year ended March 31, 2000. As a result of thischange in method of accounting, retained earnings at
March 31, 2000 and net income for the year ended
March 31, 2000 increased by ¥4,604 million and¥402 million, respectively, from the amounts which
would have been recorded if the method applied in
the previous year had been followed.

(k)

Retirement Benefits
The Company’s employees are covered by an
employees’ retirement benefit plan and an employees’ pension plan. The employees’ retirement benefit
plan provides for lump-sum payments determined byreference to their basic salary, years of service andcertain other factors. The employees’ pension plan,
which is contributory and funded, was instituted toreplace 60% of the benefits under the retirement
benefit plan for employees who retire at the mandatory retirement age, and 10% of the benefits under theretirement benefit plan for employees who retire at
Nippon Shokubai Co., Ltd. 21

age 50 or older and after 3 or more years of service.
The domestic consolidated subsidiaries have
either unfunded employees’ retirement benefits
plans and/or pension plans which are noncontributory and funded and which cover substantially all
their employees. These plans provide for lump-sum
payments and/or annuity payments payable upon
termination of employment.
Through March 31, 2000, accrued retirement
benefits for employees were stated at the amountwhich would be required to be paid if all employees
covered by the plans voluntarily terminated theiremployment with their respective companies at thebalance sheet date, less the balance of the funds inthe pension plan.
Effective April 1, 2000, the Company and theconsolidated domestic subsidiaries adopted the“Accounting Standard for Retirement Benefits”
which was issued by the Business Accounting
Deliberation Council of Japan. In accordance withthis standard, accrued returned benefits are provided
based on the amount of the projected benefit obligation reduced by the pension plan assets at fair value
at the end of the annual period. The net retirement
benefit obligation at transition of ¥3,813 million($30,775 thousand) has been fully charged toincome for the year ended March 31, 2001.
In connection with the adoption of this standard,
the Company contributed its own securities to an
employees’ retirement benefit trust. In forming thetrust and contributing its marketable securities, theCompany recognized a gain of ¥3,233 million($26,094 thousand) arising from the valuation of themarketable securities. This has been presented in
the consolidated statements of income for the year
ended March 31, 2001 as gain on marketablesecurities contributied to the employees’ retirement
benefit trust.
Prior service cost is amortized principally by thestraight-line method over 5 years, which is within theestimated average remaining years of service of theemployees.
Actuarial gain or loss is amortized in the year
following the year in which the gain or loss isrecognized principally by the straight-line method
over 10 years, which is within the estimated averageremaining years of service of the eligible employees.
The effect of the adoption of the revised standard
for retirement benefits was to decrease income before
income taxes and minority interests for the year ended
March 31, 2001 by ¥785 million ($6,336 thousand)from the amount which would have been recorded
22 Nippon Shokubai Co., Ltd.

under the method applied in the previous year.
In addition, directors and corporate auditors of
the Company and certain consolidated subsidiaries
are customarily entitled to lump-sum payments
under their respective unfunded retirement benefit
plans. The provision for retirement benefits for theseofficers has been made at an estimated amount.
(l)Appropriation of Retained Earnings
Under the Commercial Code of Japan, theappropriation of retained earnings with respect to agiven financial period is made by resolution of theshareholders at a general meeting held subsequent tothe close of such financial period. The accounts forthat period do not, therefore, reflect such appropriations (see Note 17).

2. U.S. Dollar Amounts
The translation of yen amounts into U.S. dollar
amounts is included solely for convenience, as amatter of arithmetic computation only, at the rate of¥123.9 = U.S.$1.00, the approximate rate of exchange in effect on March 31, 2001. The translation
should not be construed as a representation that yen
have been, could have been, or could in the future
be, converted into U.S. dollars at the above or any
other rate.

3. Changes in Accounting Policy(a)Effective April 1, 2000, the Company haschanged its method of accounting for inventories
from the last-in, first-out method to the movingaverage method. This change was made to present
the operating results more accurately in considerationof the price fluctuations of raw materials. As a resultof this change, consolidated operating income andincome before income taxes and minority interests
for the year ended March 31, 2001 increased by ¥292
million ($2,357 thousand) over the amount which
would have been recorded if the method applied in
the previous year had been followed.

(b)

Effective April 1, 2000, the Company haschanged its method of accounting for the carrying
value of other securities from the average method tothe moving-average method. This change was madeto monitor gain or loss on sales of securities moreclosely on a monthly basis. This change had noeffect on the consolidated results of the Company.

4. Acquisition
On October 23, 2000, the Company acquired

24,545 thousand shares of PT NISSHOKUTRIPOLYTA ACRYLINDO (“NTA”) for ¥2,354
million ($18,999 thousand) in cash. NTA manufactures acrylic acid and acrylic esters and distributes
these products to the Company and an affiliate.
Prior to the acquisition, the Company owned approximately 50.0% of the common stock of NTA.
As a result of this acquisition, the Company now
owns approximately 90.9% of the common stock of
NTA.
In 2001, the name “PT NISSHOKU TRIPOLYTAACRYLINDO” was changed to “PT Nippon ShokubaiIndonesia.”

5. Short-Term Investments and Investments in
Securities
Information on the carrying and market value ofthe marketable securities classified as other securities at March 31, 2001 was as follows:
2001(Millions of yen)(Thousands of
U.S. dollars)¥12,990
16,149$104,843
130,339

Marketable available:
Carrying value ................
Market value ..................

Information on the carrying and market value ofthe marketable equity securities included in shortterm investments and investments in securities at
March 31, 2000 is summarized as follows:
2000
Carrying
MarketAmountvalue(Millions of yen)

Short-term investments ........
Investments in securities ......

¥8
11,962¥8
24,146

6. Inventories
Inventories at March 31, 2001 and 2000 were as
follows:
2001

2000

(Millions of yen)

Merchandise andfinished goods .....
Raw materials ...........
Work in process ........
Supplies ....................

¥11,717
8,129
8,270
1,730
¥29,846¥10,735
5,982
6,367
1,324
¥24,408

2001(Thousands of
U.S. dollars)$94,568
65,60966,748
13,963$240,888

7. Short-Term Bank Loans and Long-Term Debt
Short-term bank loans consisted mainly of
unsecured loans. The average interest rates on the
short-term bank loans outstanding at March 31,
2001 and 2000 were 2.37% and 0.81%, respectively.
Long-term debt at March 31, 2001 and 2000
consisted of the following:
2001

2000

(Millions of yen)

2001
(Thousands of
U.S. dollars)

1.425% unsecured bonds
due November 2002 ................ ¥5,000 ¥5,000 $40,355
1.85% unsecured bonds due
November 2004 ....................... 5,000
5,000
40,355
Unsecured loans from banks andinsurance companies,
payable in yen, at rates
from 1.03% to 2.66%,
due through 2005 ..................... 12,576 16,371 101,501
Unsecured loans from banks,
payable in U.S. dollars,
at rates from 6.70% to 8.40%,
due through 2009 ..................... 10,212
2,458
82,422
Euro, at rates from 4.82%
to 5.77%, due through 2007 .... 3,915—
31,598
Secured loans from banks andinsurance companies,
payable in yen, at rates
from 1.10% to 5.60%,
due through 2008 ..................... 4,980
6,432
40,194
Secured loans from banks,
payable in yen,
at rates 7.85%,
due through 2004 ..................... 5,507—
44,446................................................. 47,190 35,261 380,871
Less current portion .................... (9,186) (5,520) (74,140)................................................. ¥38,004 ¥29,741 $306,731

The aggregate annual maturities of long-term debt
subsequent to March 31, 2001 are summarized below:(Thousands of
U.S. dollars)Year ending March 31(Millions of yen)

2002
2003
2004
2005
2006 and thereafter¥9,18615,320
5,946
9,935
6,803

$74,140
123,648
47,99080,18654,907¥47,190$380,871

Nippon Shokubai Co., Ltd. 23

Assets pledged as collateral for long-term debt,
including the current portion thereof, and accounts
and notes payable at March 31, 2001 and 2000 wereas follows:
2001

2000

(Millions of yen)Time deposits ...................
Land ..................................
Buildings and structures .....
Machinery and equipment ..
Investments in securities ....

¥ 258
2,705
1,564
11,882
4,304¥20,713

¥ 278
1,145
1,003
1,191
4,193
¥7,8102001(Thousands of
U.S. dollars)$2,082
21,832
12,623
95,89934,739$167,175

8. Retirement Benefits
The following table sets forth the changes in theretirement benefit obligation, plan assets and funded
status of the Companies at March 31, 2001:(Thousands of(Millions of yen) U.S. dollars)

Retirement benefit obligation at
end of year ................................... ¥(36,033) $(290,823)
Fair value of plan assets at endof year .......................................... 26,086
210,541
Unfunded retirement benefit
obligation ..................................... (9,947)(80,282)
Unrecognized actuarial loss ............
2,744
22,147
Unrecognized past service cost ....... (1,816)(14,657)
Net retirement benefit obligation
at transition .................................. (9,019)(72,792)
Prepaid pension cost ........................
3
25
Accrued retirement benefits ............ ¥(9,022) $(72,817)

The components of retirement benefit expenses
for the year ended March 31, 2001 are outlined asfollows:(Millions of yen)

Service cost ............................
Interest cost ............................
Expected return on plan assets ..
Amortization:
Retirement benefit obligation
at transition .....................
Past service cost .................
Retirement benefit expenses ..
24 Nippon Shokubai Co., Ltd.

(Thousands of
U.S. dollars)¥1,8871,225(984)$15,230
9,887(7,942)

3,813
(216)
¥5,72530,775(1,743)$46,207

The assumptions used in accounting for thedefined benefit plans for the year ended March 31,
2001 were as follows:
Discount rate ...................................
Expected rate of
return on plan assets ....................

3.5%
Principally 4.5%

9. Income Taxes
Income taxes applicable to the Company and its
domestic consolidated subsidiaries consist of
corporation, inhabitants’ and enterprise taxes. The
statutory tax rate in Japan for the years ended March
31, 2001 and 2000 was, in the aggregate, approximately 42.0%. The effective tax rates reflected in
the consolidated statements of income for the year
ended March 31, 2001 differ from the above statutory tax rate for the following reasons:Statutory tax rate ...........................
Effect of:
Equity in losses ofan unconsolidated
subsidiary and affiliates ...........
Exclusion from equity method....
Permanently nondeductible
expenses ...................................
Permanently nontaxable
dividends received ...................
Foreign tax credits ......................
Other, net .....................................
Effective tax rates ..........................

2001

2000

42.0%

42.0%

17.3
—

10.4
(4.0)

3.2

2.3

(3.4)
(4.9)
2.0
56.2%

(1.8)
(3.1)
0.1
45.9%

Deferred income taxes reflect the net tax effectof the temporary differences between the carrying
amounts of the assets and liabilities for financial
reporting purposes and the corresponding tax bases
reported for income tax purposes. The significant
components of the deferred tax assets and liabilitiesof the Company and consolidated subsidiaries at
March 31, 2001 and 2000 are summarized asfollows:

2001

2000

2001

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

Deferred tax assets:
Accrued severance benefits .. ¥2,384
Intercompany profit oninventories and property,
plant and equipment ........
800
Reserve for repairs ..............
999
Depreciation andamortization .....................
488
Accrued employees’ bonuses ..
357
Impairment of investments
in securities and others ....
312
Accrued enterprise tax ........
146
Other ....................................
911
Total deferred tax assets ........ 6,397
Deferred tax liabilities:
Depreciation and amortization . (523)Deferred capital gains
on property..................... (379)Reserve for depreciation fortax purposes .................... (273)
Other .................................... (183)
Total deferred tax liabilities ... (1,358)
Net deferred tax assets .......... ¥5,039¥2,636$19,241

774
982

6,457
8,063

442
241

3,939
2,881

—
139
333
5,547

2,518
1,178
7,353
51,630—(4,221)(463)(3,059)(238) (2,203)(45) (1,477)(746) (10,960)¥4,801 $40,670

10. Retained Earnings
The Commercial Code of Japan provides that an
amount equal to at least 10% of cash dividends andbonuses paid to directors and corporate auditors andexactly 10% of interim cash dividends paid be
appropriated to the legal reserve until such reserve
equals 25% of the stated capital. The Code also
provides that neither additional paid-in capital nor
the legal reserve is available for dividends but both
may be used to reduce or eliminate a deficit byresolution of the shareholders or may be transferred
to stated capital by resolution of the Board of
Directors. Retained earnings include the legal
reserve provided in accordance with of the Code.
The legal reserve of the Company included inretained earnings at March 31, 2001 and 2000
amounted to ¥3,839 million ($30,985 thousand) and¥3,691 million, respectively.

11. Research and Development Costs
Research and development costs included in costof sales and selling, general and administrative
expenses for the years ended March 31, 2001 and2000 totaled ¥9,136 million ($73,737 thousand) and¥9,546 million, respectively.

12. Leases
The following pro forma amounts represent theacquisition costs (including the interest portion),
accumulated depreciation and net book value of theleased assets as of March 31, 2001 and 2000, which
would have been reflected in the balance sheets if
finance lease accounting had been applied to thefinance leases currently accounted for as operatingleases:
2001

2000(Millions ofyen)

Machinery and equipment
and software:
Acquisition costs .............. ¥796
Accumulated depreciation ... (456)Net book value ................. ¥340

¥1,008
(534)
¥474

2001
(Thousands of
U.S. dollars)$6,425(3,680)$2,745

Lease payments relating to finance leases accounted for as operating leases amounted to ¥216
million ($1,743 thousand) and ¥232 million for theyears ended March 31, 2001 and 2000, respectively.
Depreciation of the leased assets calculated by thestraight-line method over the respective lease terms
amounted to ¥216 million ($1,743 thousand) and¥232 million for the years ended March 31, 2001
and 2000, respectively.
Future minimum lease payments (including theinterest portion thereon) subsequent to March 31,
2001 for finance leases accounted for as operatingleases are summarized as follows:
Years ending March 31,
2002 ............................................
2003 and thereafter ....................

of(Millions ofyen) (Thousands
U.S. dollars)

¥170
170
¥340

$1,372
1,372$2,744

13. Contingent Liabilities
At March 31, 2001, the Company and consolidated subsidiaries were contingently liable asguarantors of indebtedness of affiliates, theCompany’s employees and other in the aggregate
amount of ¥4,428 million ($35,738 thousand).
In addition, at March 31, 2001, the Company andconsolidated subsidiaries had contingent liabilities
arising from notes discounted by banks and notes
endorsed and delivered for payment to vendors in
the aggregate amount of ¥1,537 million ($12,405
thousand).
Nippon Shokubai Co., Ltd. 25

14. Amounts Per Share
2001

2000
( yen)Net income ..................
Cash dividends ............
Net assets .....................

¥6.37
7.00
602.11¥13.547.00
609.72

2001(U.S. dollars)

$0.05
0.05
4.85

The computation of net income per share isbased on the weighted average number of shares ofcommon stock outstanding during each year.
Cash dividends per share represent the cash
dividends declared as applicable to the respective
years together with the interim cash dividends paid.
Net assets per share are based on the number ofshares outstanding at the respective balance sheet
dates.

15. Derivatives
Derivative financial instruments are utilized by
the Company and consolidated subsidiaries principally to reduce the risk of fluctuation in interest
rates and foreign exchange rates. The Company has
established a control environment which includes
policies and procedures for risk assessment and forthe approval, reporting and monitoring of transactions involving derivatives. The Company andconsolidated subsidiaries do not hold or issue
derivative financial instruments for trading purposes.

The Company and consolidated subsidiaries are
exposed to certain market risks arising from forward
foreign exchange contracts and interest rate swaps.
The Company and consolidated subsidiaries are also
exposed to the risk of credit loss in the event of nonperformance by the counterparties to these currency
and interest rate contracts; however, the Company
and consolidated subsidiaries do not anticipate
nonperformance by any of the counterparties, all ofwhom are financial institutions with high credit
ratings.
At March 31, 2001, one consolidated subsidiary
had certain interest rate swap positions outstanding.
The total fair value of these positions was immaterial.

16. Segment Information
The Company and consolidated subsidiaries areprimarily engaged in the manufacture and sale ofproducts in Japan and overseas in the following
business segments: business in the chemicals
segments conducted principally by the Company.
Business Segments
The business segment information for theCompany and consolidated subsidiaries for the years
ended March 31, 2001 and 2000 is outlined asfollows:

ChemicalsYear ended March 31, 2001
Other
Total
Eliminations or
corporate

Consolidated(Millions of yen)

I. Sales and operating income
Sales to third parties ........................................................
Intergroup sales and transfers .........................................
Total sales ........................................................................
Operating expenses .........................................................
Operating income ............................................................

¥158,2300158,230
153,492¥ 4,738¥ 2,355
8,594
10,94910,443¥ 506¥160,585
8,594
169,179
163,935¥ 5,244¥—(8,594)(8,594)(8,729)¥ 135¥160,585—
160,585
155,206¥ 5,379

II. Assets, depreciation and capital expenditures
Total assets ......................................................................
Depreciation and amortization ........................................
Capital expenditures ........................................................

¥199,632
10,0418,094¥ 7,848287
94¥207,480
10,3288,188¥ 22,988
53—¥230,468
10,3818,188

26 Nippon Shokubai Co., Ltd.

Chemicals

Year ended March 31, 2000
Other
Total
Eliminations or
corporate

Consolidated(Millions of yen)

I. Sales and operating income
Sales to third parties ........................................................
Intergroup sales and transfers .........................................

¥159,9075¥ 2,554
8,956¥162,461
8,961

Total sales ........................................................................
Operating expenses .........................................................
Operating income ............................................................

159,912
154,231¥5,681

11,51010,702¥808

II. Assets, depreciation and capital expenditures
Total assets ......................................................................
Depreciation and amortization ........................................
Capital expenditures ........................................................

¥176,708
12,3294,126¥8,475
340
83

Chemicals¥—(8,961)¥162,461—

171,422
164,933¥6,489(8,961)(9,094)¥133

162,461
155,839¥ 6,622¥185,183
12,6694,209¥ 31,713
56—¥216,896
12,725
4,209

Year ended March 31, 2001
Other
Total
Eliminations or
corporate

Consolidated(Thousands of U.S. dollars)

I. Sales and operating income
Sales to third parties ........................................................ $1,277,078
Intergroup sales and transfers .........................................
0$19,007
69,363$1,296,085
69,363—(69,363)$1,296,085—

Total sales ........................................................................ 1,277,078
Operating expenses ......................................................... 1,238,838
Operating income ............................................................ $ 38,240

88,37084,285$ 4,085

1,365,448(69,363)
1,323,123(70,452)$ 42,325 $ 1,089

1,296,085
1,252,671$ 43,414

II. Assets, depreciation and capital expenditures
Total assets ...................................................................... $1,611,235
Depreciation ....................................................................
81,041
Capital expenditures ........................................................
65,327$63,341
2,317
759$1,674,576
83,35866,086$1,860,113
83,786
66,086$$185,537
428—

As mentioned in Note 1(k), the Company and consolidated domestic subsidiaries have adopted a new accounting standard for retirement benefits. The effect of this adoption decreased operating income from thechemicals and other segments by ¥61 million ($492 thousand) and ¥78 million ($630 thousand), respectively,from the amounts which would have been recorded under the standard followed in the previous year.
As mentioned in Note 3, the Company has changed its method of accounting for inventories from the last-in,
first-out method to the moving-average method. The effect of this change increased operating income from thechemicals segment and assets at the chemicals segment by ¥292 million ($2,357 thousand) from the amounts
which would have been recorded under the method applied in the previous year.

Nippon Shokubai Co., Ltd. 27

Geographical Areas
The geographical segment information for the Company and consolidated domestic subsidiaries for the years
ended March 31, 2001 and 2000 is outlined as follows:Year ended March 31, 2001
Japan
Overseas
Total
ElimiConsolinations or
dated
corporate(Millions of yen)

I. Sales and operating income
Sales to third parties ........................................................
Intergroup sales and transfers .........................................
Total sales ........................................................................
Operating expenses .........................................................
Operating income (loss) ..................................................
II. Total assets ..............................................................

¥142,021
7,352
149,373
143,976¥5,397¥171,319¥18,564
147
18,711
18,766¥(55)¥41,980¥160,585
7,499
168,084
162,742¥5,342¥213,299¥—(7,499)(7,499)(7,536)¥37¥17,169¥160,585—
160,585
155,206¥5,379¥230,468

Japan

Year ended March 31, 2000
Overseas
Total
Eliminations or
corporate

Consolidated(Millions of yen)

I. Sales and operating income
Sales to third parties ........................................................
Intergroup sales and transfers .........................................
Total sales ........................................................................
Operating expenses .........................................................
Operating income ............................................................
II. Total assets ..............................................................

¥143,363
7,664
151,027
145,628¥5,399¥167,552¥19,098
29
19,12718,008¥1,119¥17,288¥162,461
7,693
170,154
163,636¥6,518¥184,840¥—(7,693)(7,693)(7,797)¥104¥32,056¥162,461—
162,461
155,839¥6,622¥216,896

Japan

Year ended March 31, 2001
Overseas
Total
Eliminations or
corporate

Consolidated(Thousands of U.S. dollars)

I. Sales and operating income
Sales to third parties ........................................................ $1,146,255
Intergroup sales and transfers .........................................
59,338
Total sales ....................................................................... 1,205,593
Operating expenses ......................................................... 1,162,034
Operating income (loss) ..................................................
$43,559
II. Total assets ................................................................ $1,382,720$149,830
1,186
151,016
151,460$(444)$338,822$1,296,085
60,524
1,356,609
1,313,494$43,115$1,721,542$—(60,524)(60,524)(60,823)$299$138,571$1,296,085—
1,296,085
1,252,671$43,414$1,860,113

As mentioned in Note 1(k), the Company and consolidated domestic subsidiaries have adopted a new accounting standard for retirement benefits. The effect of this adoption decreased operating income in the Japan
segment by ¥140 million ($1,130 thousand) from the amount which would have been recorded under the standard followed in the previous year.
28 Nippon Shokubai Co., Ltd.

As mentioned in Note 3, the Company has changed its method for accounting for inventories from the last-in,
first-out method to the moving-average method. The effect of this change increased operating income in theJapan segment and assets in the Japan segment by ¥292 million ($2,357 thousand) form the amounts which
would have been recorded under the method applied in the previous year.
Overseas Sales
Overseas sales, which include export sales of the Company and the domestic consolidated subsidiaries andsales (other than exports to Japan) of the foreign consolidated subsidiaries, for the years ended March 31, 2001
and 2000 are summarized as follows:

Asia

Year ended March 31, 2001
EuropeAmerica
Other

Total

(Millions of yen)Overseas sales .................................................................
Overseas sales as a percentage of consolidated
net sales ................................................................

¥19,428¥13,948¥13,770¥3,805¥50,951

12.1%

8.7%

8.6%

2.3%

31.7%

Asia

Year ended March 31, 2000
EuropeAmerica
Other

Total

(Millions of yen)Overseas sales .................................................................
Overseas sales as a percentage of consolidated
net sales ................................................................

¥20,119¥15,405¥13,905¥5,191¥54,620

12.4%

9.5%

8.5%

3.2%

33.6%

Asia

Year ended March 31, 2001
EuropeAmerica
Other

Total

(Thousands of U.S. dollars)

Overseas sales .................................................................

$156,804$112,575$111,138$30,710

17. Subsequent Event
The following appropriations of retained earnings of the Company, which have not been reflectedin the accompanying consolidated financial statements for the year ended March 31, 2001, wereapproved at a shareholders’ meeting held on June
26, 2001:$411,227(Millions (Thousands ofof yen)U.S. dollars)

Cash dividends (¥3.50 = $ 0.03
per share) ...................................
Bonuses to directors and corporate
auditors ......................................

¥682$5,504

77
¥759

621
$6,125

Nippon Shokubai Co., Ltd. 29

Corporate Data

NIPPON SHOKUBAI CO., LTD.
Incorporated

Organization(as of April, 2001)

August 21, 1941

Division

Common Stock
Authorized:
424,000,000 shares
Issued:194,881,287 sharesInternal Audit Office
Corporate Planning

Capital¥16,529,413,238

General Administration

Number of Employees
2,147

Board of Directors

Stock Listings
First Section, Tokyo Stock ExchangeFirst Section, Osaka Securities ExchangeFirst Section, Nagoya Stock Exchange
Transfer Agent
The Toyo Trust & Banking Co., Ltd.
1-4-3 Marunouchi, Chiyoda-ku
Tokyo 100-0005, Japan

President

Finance

Corporate
Management
Committee

Purchase & Distribution

Production

Engineering(as of March 31, 2001)

International Project

Board of Directors
Chairman:
Kenji Aida

Research & Development

President:
Hiroshi Yanagida

New Business Planning

Executive Managing Director:
Yasumasa Oba

Chemicals Sales

Senior Managing Directors:
Yoshinori Sano
Kinya Hasegawa

Fine & Specialty Chemicals Sales

Environmental Business

Managing Directors:
Takeo Munehiro
Hisayoshi Jono
Keizo Maruyama

Tatsuo Konishi
Kazunosuke Nagai

Superabsorbent Polymers Sales

Directors:
Takahiro Toyohama Tsumoru Yamada
Yutaka Morimoto
Yuji Noma
Norimitsu Konno
Tsuneyuki Nakashima
Michio Ueshima

Resins BusinessCorporate Auditors:
Masaru Abe
Haruki Yoshida

Himeji Plant

Tadashi Kimura
Kaneyoshi Nishiyama(as of June 26, 2001)

30 Nippon Shokubai Co., Ltd.

Kawasaki Plant

Auditor

Auditor OfficeConsolidated Subsidiaries
Name

Paid-in
EquityCapital Ownership Principal Business(millions)(%)

President

Nippoh Chemicals Co., Ltd.*

¥517

67.9

Manufacture and sale of iodine,
iodic compounds, and natural gas

Tadao Kondo

Nippon Polyester Co., Ltd.*

¥400

97.2

Manufacture and sale of synthetic
resins and related additives

Yoshizumi Ozawa

Daiko Kaiun Co., Ltd.*

¥100

64.9

Transport

Katsunobu Kaneko

Tokyo Fine Chemical Co., Ltd.*

¥80

66.2

Manufacture and sale of stabilizerof vinyl chloride resin andanti-freeze

Masatoshi Tsuchino

Chugoku Kako Co., Ltd.*

¥75

74.7

Manufacture and sale of synthetic
resins and heat insulator

Masaji Yamaoka

Shinritsu Co., Ltd.*

¥40

73.1

Sale of chemical products

Toyohiko Kunihara

Nisshoku Kosan Co., Ltd.*

¥32

100.0

Management of golf driving range
and non-life insurance agent

Toshiyuki Sone

NA Industries, Inc.*

US$1.525** 100.0

Manufacture and sale of superabsorbent polymers
Technical liaison and businessdevelopment

Katsumi Uchida

Ultrasorb Chemikalien GmbH*

DM2.1

100.0

Sale of superabsorbent polymers

Norihito Hirose

Nippon Shokubai (Asia) Pte. Ltd.*

S$0.3

100.0

Sale of chemical products

Kazuhiro Noda

Nippon Shokubai Europe N.V.*

EUR27

100.0

Manufacture ofsuperabsorbent
polymers

Tadihiro Yoneda

P.T. Nippon Shokubai Indonesia*

US$12093.8

Manufacture and sale of acrylicacid and acrylic esters

Takashi Onishi

Nihon Jyoryu Kogyo Co., Ltd.

¥90

46.6

Manufacture and sale ofanthraquinone, carbozole, andtheir derivatives

Kensuke Kumazawa

ICT Co., Ltd.

¥270

50.0

Sale of automobile exhaust catalyst

Kazuo Koshida

Nippon Polymer Ind. Co., Ltd.

¥100

50.0

Manufacture and sale of acrylic
emulsions

Yoshio Yasuda

Nisshoku Schenectady Kagaku, Inc.

¥40

45.0

Manufacture and sale of insulating
varnish and enamel

Kenji Aida

Singapore MMA Monomer Pte. Ltd.

S$65.740.0

Manufacture and sale of methacrylic acid and methacrylic
estersKazutoshi Matsukawa

International Catalyst Technology, Inc. US$7.4

50.0

Manufacture and sale of automobile exhaust catalyst

J. Plessow(as of June 30, 2001)
Included in consolidation
American Acryl NA LLC, and American Acryl LP., are consolidated into NA Industries, Inc. by the equity method.
** This item only thousand dollars*

Nippon Shokubai Co., Ltd. 31

Directory

HEAD OFFICESLABORATORIESOsaka Office
Kogin Bldg.
4-1-1 Koraibashi, Chuo-ku
Osaka 541-0043, Japan
Telephone: 81-6-6223-9111
Facsimile: 81-6-6201-3716

Strategic Technology Research Center
5-8 Nishi Otabi-cho, Suita
Osaka 564-8512, JapanTokyo Office
Hibiya Dai Bldg.
1-2-2 Uchisaiwai-cho, Chiyoda-ku
Tokyo 100-0011, Japan
Telephone: 81-3-3506-7475
Facsimile: 81-3-3506-7598

SALES OFFICES
Nagoya Sales Office
Nagoya Mitsui Bldg., Annex
1-24-21 Meiekiminami, Nakamura-ku
Nagoya 450-0003, Japan
Fukuoka Sales Office
Hakata Bldg.
8-36 Hakataeki Chuogai, Hakata-ku
Fukuoka 812-0012, Japan
PLANTS
Kawasaki Chidori Plant
14-1 Chidori-cho, Kawasaki-ku
Kawasaki, Kanagawa 210-0865, Japan
Kawasaki Ukishima Plant
10-12 Ukishima-cho, Kawasaki-ku
Kawasaki, Kanagawa 210-0862, Japan
Himeji Plant
992-1 Aza Nishioki Okihama, Aboshi-ku
Himeji, Hyogo 671-1241, Japan
Suita Plant
5-8 Nishi Otabi-cho, Suita
Osaka 564-0034, Japan

Performance Chemicals & Materials ResearchCenter
5-8 Nishi Otabi-cho, Suita
Osaka 564-8512, Japan
Polymers Research Center
5-8 Nishi Otabi-cho, Suita
Osaka 564-8512, Japan
Catalysts Research Center
992-1 Aza Nishioki Okihama, Aboshi-ku
Himeji, Hyogo 671-1241, Japan
Process Technology Center
992-1 Aza Nishioki Okihama, Aboshi-ku
Himeji, Hyogo 671-1241, JapanOVERSEAS COMPANIESNA Industries, Inc.
P.O. Box 5407
2651 Riverport Road
Chattanooga, TN 37406, U.S.A.
Telephone: 1-423-624-6496
Facsimile: 1-423-629-0531
NIPPON SHOKUBAI (ASIA) PTE. LTD.
138 Cecil Street, #05-04
Cecil Court, Singapore 069538
Telephone: 65-225-6313
Facsimile: 65-225-0969
ULTRASORB Chemikalien GmbH
Niedenau 61-63
60325 Frankfurt am Main, Germany
Telephone: 49-69-7103-4331
Facsimile: 49-69-9720-6441
Nippon Shokubai Europe N.V.
Haven 1053 Nieuwe Weg 1, B-2070
Zwijndrecht, Belgium
Telephone: 32-3-250-3701
Facsimile: 32-3-250-3712
PT. NIPPON SHOKUBAI INDONESIA
Wisma 46, KOTA BNI 31st Floor,
Suite 3102-3104 JI. Jend. Sudirman
Kav.1 Jakarta 10220, Indonesia
Telephone: 62-215-745111
Facsimile: 62-215-745222

32 Nippon Shokubai Co., Ltd.

Osaka Office
Kogin Bldg.
4-1-1 Koraibashi, Chuo-ku
Osaka 541-0043, Japan
Telephone: +81-6-6223-9111
Facsimile: +81-6-6201-3716
Tokyo Office
Hibiya Dai Bldg.
1-2-2 Uchisaiwai-cho, Chiyoda-ku
Tokyo 100-0011, Japan
Telephone: +81-3-3506-7475
Facsimile: +81-3-3506-7598
URL: http://www.shokubai.co.jp’01 Aug., 2000
Printed in Japan