Management Policy
Corporate Philosophy
At the center of our corporate philosophy is the desire to
be known as an international company whose activities
always give rise to new expectations.
We have been pursuing this goal by taking our place on
the global stage with conviction and by persisting in
maximizing our potential as a unique chemical enterpriseof distinct originality. We have also worked to secure thesupport of our shareholders, employees, and business
partners, as well as our regional community.
In our growth strategy, we have taken care to balancebusiness expansion and corporate health, and have acted
as a responsible corporate citizen of our community andin our environment.

Medium-Term Strategy
In running our operations, we have been following theCompany's fourth 5-year medium-term business plan,
which started in fiscal 1996. The plan assigns priority to:a) boosting the comprehensive strength of the Kuraray
Group; b) creating new businesses; c) building aneffective management system; d) raising a new corporate
culture. By working towards these four main points, we
endeavor to realize the objective of 'Continuing Our
Global Development as a Unique Chemical Enterprise
Into the 21st Century.'
As part of these efforts, we made significant
investments in our core operations during the first two
years of the management plan. This period served to lay
the foundation for realizing our 5-year agenda, while theremaining three years have been dedicated to
implementation. In Japan, we invested in additional
capacity for the thermoplastic elastomers "SEPTON" and"HYBRAR" and for the man-made leather "CLARINO."
Overseas, we set up a new plant for Poval in Singapore

and another one for the EVOH resin "EVAL" in
Belgium. All facilities went on stream as scheduled
without experiencing problems.
Fiscal 2000, ending March 31, 2001, marks the final
year of the management plan, a compelling reason for us
to run our business with the focus on maximizing thepotential of these investments.

Dividend Policy
Shareholder participation in the Company's earnings
remains a top-ranking management issue. To assure bothsustained earnings growth and an adequate dividendlevel, as for now, a dividend policy has been adopted
with a payout ratio targeting 30% and cash dividends
payable linked to business performance under applicationof a basic dividend benchmark of ¥8. Retained funds, on
the other hand, will be applied to strengthening andexpanding the organization through strategic
investments, including M&A transactions, as foundnecessary both in Japan and overseas.

Future Issues
Under the framework of its basic management policies,
the Company pursues a course of expansion with due
regard for corporate health while strengthening thefoundations of its core businesses and developing its
global operations. Capital expenditures on new facilities,
designated business platforms for the next century, aremaking good progress. At the same time, amid efforts tostrengthen the Company's international profile, we areworking to speed up earnings contributions fromcompleted facilities.
Fiscal 2000 marks the final year of our fourth mediumterm management plan, and also requires us to formulate
goals and objectives for the next medium-term planning
period. In the course of this process we will also map out
our long-range strategies. Among other issues, the focus
will be on raising the efficiency of operating andadministrative systems through IT applications asmeasures towards creating a new management systemand determining the Group's overall future direction.

The Company highly values the views of its
shareholders and investors, and to better convey thismanagement policy, an Office of Investor Relations was
set up and started operating in the term under review.
This step widens the flow of communication from thedissemination of corporate news to the aggregation ofshareholder opinions, and allows incorporating thisinformation into the management process.
We believe that involvement with the regional
community and the environment is at the basis ofcorporate activity. Hence, it is logical that we persist in
our efforts to reduce the burden on the environment anddevelop environmentally sound products. At the sametime, we continue to invest in the thermal recycling ofplastic waste, a reflection of our desire to contribute to
the system of recycling-based manufacturing. We havebeen participating in Responsible Care activities since
the establishment of the Japan Responsible Care
Association. As part of these activities, we have acquired
ISO14001 certification, the international standard forenvironmental management systems, for our Kashima
Plant, Okayama Plant, and Nakajo Plant. Preparations toacquire ISO14001 for our other plants and researchfacilities in Japan are making progress, and we expect thecertifications to be awarded later this year.

Business Performance
Conditions During the Term
The Kuraray Group's business environment remained
severe during the term under review against thebackground of a sluggish recovery by the Japanese
economy, aggravated by the yen's steep appreciation andsharply rising prices of crude oil and raw materials. In
these circumstances, the Group worked to minimize thedecline in earnings by expanding unit sales - centered on
in-house developed materials - and reducing costs.
Despite these efforts, net sales on a consolidated basis
declined by ¥20,022 million (6.0%) from the previous
term, to ¥316,444 million, while operating income wasdown ¥6,827 million (25.1%) at ¥20,321 million. Net
income declined by ¥5,719 million (43.4%) to ¥7,452
million, due to special provision for retirement benefits
by the parent company.
Segmental breakdowns of business results are as
follows.

1. Segmentation by Type of Businessa. Fibers and Textiles
Net sales by the Company's Fibers and Textiles Division
declined ¥5,032 million, or 4.9%, from the previous
term, to ¥98,088 million, whereas operating income rose
¥83 million, or 3.1%, to ¥2,769 million.
(1) The polyester business recorded a decline in net sales
against the background of sluggish consumption in theJapanese market, but an improvement was seen inearnings thanks to expanded sales of high-quality
products and cost reductions.
(2) Although sales of "KURALON" for traditional uses
stagnated, net sales overall held firm, thanks to increased
sales of "KURALON" for applications that make themost of its unique properties, such use as an asbestos
substitute in fiber-reinforced cement. Growth in demandwas also seen for the new synthetic fiber "KURALON
K-II," mass-production of which commenced last year.
As a result, net sales increased while earnings remained
flat from the previous term's level.
(3) A decline in demand pulled down sales of rayon inboth the Japanese and overseas markets, and despite
efforts to reduce costs, this business remained in the red.
(4) The woven and knitted products business, which hasbases in Southeast Asia, trended as per expectations,
posting an increase in net sales over the previous term.
b. Chemical Products
Net sales by the Chemical Products Division rose ¥2,364
million, or 1.7%, to ¥144,435 million but operating
income fell ¥4,341 million, or 26.3%, to ¥12,160 million.
(1) Poval enjoyed firm sales in the Japanese market for
use in polyvinyl butyral safety glass interlayers, whilepoval film for LCDs also posted good sales. In addition,
the Singapore plant - Poval Asia Pte Ltd - a joint venturewith The Nippon Synthetic Chemical Industry Co., Ltd.,
began operation on schedule from the term under review.
Thanks to these various factors, total net sales registeredan increase over the previous term. Earnings, however,declined as a result of higher fuel and raw material costs
and start-up loss relating to the establishment of theSingapore joint venture.
(2) Demand in Japan for an EVOH resin "EVAL," wasvery strong during the term under review, thanks to
growing environmental awareness. Business in the U.S.
also followed a firm trend, while a new plant began
operation in Belgium. Despite these positive factors,
however, both net sales and earnings declined, partly as aresult of the yen's appreciation.
Thanks to the establishment of new plants during theterm by both the poval and "EVAL" businesses, Kurarayfurther cemented its position as the world's No. 1
enterprise.
(3) In the area of methacrylic resin products, sales ofprojection TV screens remained firm, while prices of theresin itself rose against the background of a shortfall in
supply during the latter half of the term, leading to a

year-on-year growth in net sales. An improvement wasalso seen in earnings thanks to effective cost-cutting
measures.
(4) In the field of isoprene chemical products, strong
growth was seen in demand for thermoplastic elastomers
such as "SEPTON," a substitute for sulfurized rubber,and "HYBRAR," used in making environmentallyfriendly wrapping film. Production facilities that started
operation during the term got smoothly underway
according to schedule. However, overall net sales andearnings both declined from the previous term owing tostiff competition in the fields of fine chemicals such as
agrochemical intermediates and raw materials ofvitamins.
(5) Among other main chemical products, sales ofactivated carbon products posted a year-on-year decline
owing to the effect of the cutback in the nation's public
investment budget, but earnings managed to stay flat
thanks to the promotion of cost reduction. In processed
resin products, the development of new products andnew applications led to increased earnings despite a dropin net sales.
c. Man-Made Leather, Nonwoven Fabrics, andFastening Materials
Net sales for the term by the man-made leather,nonwoven fabrics, and fastening materials businessdeclined ¥2,267 million, or 6.4%, to ¥33,290 million,
while operating income was down ¥2,248 million, or
48.3%, at ¥2,402 million.
(1) "CLARINO" man-made leather suffered declines inboth sales and earnings as a result of the appreciation of
the yen and a falloff in sales of suede to Europe forapparel use, which had been doing well up to andincluding the previous term.
(2) In the Company's nonwoven fabric business, finishedproducts did well, while in the fastener business, the"FREEMAGIC" fastener, which boasts special features,
enjoyed increased sales, principally for clothing use. All
businesses recorded growth in net sales, while earnings
were flat.

d. Diversified BusinessNet sales by the Diversified Business Division fell
¥15,087 million, or 27.1%, from the previous term to¥40,631 million, whereas operating income increased¥117 million, or 3.3%, to ¥3,629 million.
(1) In the medical products business, the Company's
contact lenses were hit by severe competition from
disposable contact lenses, causing prices to decline, but
increased sales were recorded by dental materials, where
overseas developments continued smoothly. As a result,although net sales declined, earnings held flat.
(2) The Kuraray Group's engineering business registereda sharp decrease in sales due to the completion in theprevious term of a large-scale plant project forSingapore. The consulting business recorded increased
sales thanks to continued brisk business related to theacquisition of ISO series certifications.

2. Segmentation by geographical region
a. Japan
Faced with a difficult business environment in which
consumer spending was slack and demand from theautomotive industry and housing industry fell, sales
totaled ¥283,491 million, while operating income
amounted to ¥17,862 million.
b. Other regions
Sales totaled ¥32,953 million, while operating income
amounted to ¥2,580 million.
1) In the US, despite robust growth in the chemical
products business, an adverse exchange rate led todecreases in sales and income.
2) In Europe, while the opening of the "EVAL" Plant in
Belgium contributed to growth, an unfavorable exchange
rate and a fall in demand for man-made leather resulted
in a decrease in both sales and earnings.
3) In Southeast Asia, output from the newly opened
Poval Plant in Singapore, a joint venture with The
Nippon Synthetic Chemical Industry Co., Ltd.,
contributed to a rise in net sales. However, earnings wereheld down by start-up loss related to the establishment of
the plant.

3. Cash Flows
In the term under review, flows of cash and cash
equivalents (hereafter, cash) were as follows.
On a consolidated basis, cash outflows of ¥42,752
million used in investing activities exceeded cash inflowsof ¥25,066 million provided by operating activities and¥3,040 million provided by financing activities. As aresult, cash at the end of the period decreased by ¥15,048
million (52.0%) from the previous term to ¥13,869
million.
The following is a breakdown of cash flow information
by operating, investing, and financing activities.
a) Cash flows from operating activities
In the term under review, net income in the amount of¥7,452 million and depreciation and amortization of¥16,769 million were partially cancelled out by increase
in inventories. As a result, net cash provided byoperating activities amounted to ¥25,066 million.
b) Cash flows from investing activities
In the term under review, investment activities included
capital expenditures and increase in marketable securities
for the purpose of building reserves. As a result, net cashused in investment activities amounted to ¥42,752
million.
c) Cash flows from financing activities
In the term under review, the Company financed
investment in the "EVAL" plant in Europe by increasing
the volume of its loans, while the issuance of stock
following the exercise of warrants resulted in an
improvement in the Company's cash position. These
inflows were partially offset by warrant bond redemption
and dividend payments by the parent company. As aresult, net cash provided by financing activities
amounted to ¥3,040 million.

4. Othera) Dividend payments
The Company will pay a dividend of ¥9 per share. The
dividend comprises an ordinary dividend of ¥8 per shareand a special dividend of ¥1 per share. The Company has
paid an ordinary dividend of ¥4 per share and a special
dividend of ¥0.50 per share for the interim term.
b) The Y2K (Year 2000) Problem
In the term under review, the possible occurrence ofcomputer malfunctions as a result of the Y2K Problem
was a topic of concern. The Company made thoroughefforts to ensure that its operational support systems andproduction control systems would be unaffected by theY2K problem. As a result, no major malfunctions that
could have significantly interrupted business operations
occurred. Y2K-related expenses, including software
costs and outsourcing expenses, totaled ¥229 million(note: ¥58 million incurred during the term underreview).

Outlook for Fiscal 2000
The Japanese economy is expected to recover in thesecond half of fiscal 2000. Although a slowdown in thecurrent expansion of the US economy cannot be entirely
ruled out, assuming that it remains largely unchanged,
the Company estimates sales of ¥335 billion and ordinary
income of ¥26 billion. Kuraray estimates net income of¥9 billion, taking into account the lump-sum
amortization of Kuraray's remaining prior service costs(¥9.5 billion) in fiscal 2000,and losses arising from theCompany's scheduled withdrawal from the rayon
business in March 2001.
Strong sales growth in the fiber business is unlikely due
to an expected lag in the recovery of domestic demand.
The Company aims to improve its earnings situation by
specializing in the manufacture of distinctive and valueadded polyester products.
In the chemical products business, we will aim at raisingsales and earnings by expanding our core businesses suchas poval, "EVAL", and thermoplastic elastomers. The
absence of start-up loss for the establishment of newplants in fiscal 2000 and the improvement in the
profitability of acrylic resins are expected to enhancebusiness performance.
Projections have been made assuming an averageexchange rate of ¥105 against the US dollar and a Dubai
crude oil price of $21 per barrel.
The Company is expected to make annual dividend
payments of ¥9 per share, comprising ¥8 in ordinary
dividends, and ¥1 in special dividends.

Years ended March 31, 2000 and 1999
Net sales
Cost of sales
Selling, general and administrative expenses
Operating income
Net income
Total assets
Shareholders' equity
Equity ratio(%)
Net income per shareprimary
fully diluted
Book value per share

Millions of yen
2000
1999
¥316,444¥336,466
235,603250,195
60,52059,123
20,321
27,148
7,452
13,171
503,766
487,991
282,755
259,909
56.1
53.3
Yen per share

Thousands of
U.S.dollars
2000$2,985,321
2,222,670
570,943
191,708$70,3024,752,509
2,667,500
56.1

20.00
19.42
738.5336.83
34.56
714.21

$0.19
$0.18
$697

2.7
4.1

5.3
5.6

2.7
4.1

Return on Equity(%)
Return on Assets(Operating income/ASSETS)(%)
Note : The United States dollar amounts represent translation of Japanese yen at the rate of ¥106=$1.

Certain reclassifications of previously reported amounts have been made to conform with current classifications.

CONSOLIDATED BALANCE SHEETS(unaudited)

Kuraray Co., Ltd. and Consolidated Subsidiaries

March 31, 2000 and 1999ASSETS
Current assets:
Cash and cash equivalents
Marketable securities
Notes and accounts receivable:
Trade
Unconsolidated subsidiaries and affiliates
Other
Loans receivable to unconsolidated subsidiaries and affiliates
Allowance for doubtful accounts

Inventories
Deferred income taxes
Other current assets
Total current assets

Property, plant and equipment:
Land
Buildings
Machinery and equipment
Construction in progress
Less accumulated depreciation

Investments and other assets:
Investment securities
Investments in unconsolidated subsidiaries and affiliates
Loans receivable to:Unconsolidated subsidiaries and affiliates
Other
Deferred income taxes
Cumulative translation adjustments
Other
Allowance for doubtful accounts

Millions of yen
2000

1999

Thousands of
U.S.dollars
2000¥13,869
26,033¥28,917
10,072$130,840
245,594

89,102
789
3,634
541
(696)
93,37089,466
1,316
3,493
509
(844)
93,940840,585
7,443
34,283
5,104(6,566)880,849

75,1203,761
1,140
213,293

70,624
3,604
956
208,113708,679
35,481
10,7552,012,198

25,176
86,213351,695
4,356
467,440(339,097)
128,343

25,397
79,535332,365
17,255454,552(325,526)
129,026

237,509813,330
3,317,877
41,095
4,409,811(3,199,029)
1,210,782

80,9102,687

77,143
2,983

763,30225,349

5,345
1,293
7,196
65,988(1,289)162,130¥503,766

6,040
1,329
3,149
1,518
59,567(877)
150,852¥487,991

50,425
12,19867,887-

622,528(12,160)
1,529,529$4,752,509

1999

Thousands of
U.S.dollars
2000¥3,8053,467¥5,80920,382$35,896
32,70851,257
1,149
6,945
4,312
21
16,63687,592

49,876
886
5,822
4,305
21,181
108,261483,557
10,84065,51940,679198
156,943826,340

94,225
3,164
22,164
13,494133,047

93,923
2,866
12,684
9,978
119,451

888,915
29,849209,094
127,302
1,255,160

372

370

3,509

88,95587,147111,151(4,496)
282,757(2)
282,755¥503,766

78,66074,225
107,029
259,914(5)
259,909¥487,991

839,198

Millions of yen
2000
LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:
Short-term bank loans
Current portion of long-term debt
Notes and accounts payable:
Trade
Unconsolidated subsidiaries and affiliates
Other
Accrued income taxes
Deferred income taxes
Accrued expenses and otherTotal current liabilities

Long-term liabilities:
Long-term debt
Deferred income taxes
Accrued retirement benefits
Other
Total long-term liabilities

Minority interests

Shareholders' equity:
Common stock with par value of ¥50 ($0.47) per share:
Authorized−700,000,000shares
Issued and outstanding−382,863,603 shares at March 31, 2000
Issued and outstanding−363,913,184 shares at March 31, 1999
Additional paid-in capital
Retained earnings
Cumulative translation adjustments
Treasury stock at cost
Total shareholders' equity

Note : The United States dollar amounts represent translation of Japanese yen at the rate of ¥106=$1.
Cash and cash equivalents included all highly liquid investments with original maturities of three months or less, which can be withdrawn at least at face amount at any time without penalty.
The Companies changed the scope of cash equivalents according to the issuance of accounting standards for preparation of consolidated statement of cash flows, previously the Companies
classified as cash equivalents all time deposits with original maturities of one year or less.
The Companies changed its method of accounting for amortization of prior service costs with the contributory pension plan from a cash basis to an accrual basis in order to provide a more
appropriate allocating costs of pension costs and to make its financial position sound.
The Companies changed its presentation of cumulative translation adjustments from "Investments and other assets" to "Shareholders' equity" to conform with an amendment to theJapanese Securities and Exchange Law and related accounting regulations.
Certain reclassifications of previously reported amounts have been made to conform with current classifications.

‑1‑-

822,142
1,048,594(42,415)
2,667,519(19)
2,667,500$4,752,509

CONSOLIDATED STATEMENTS OF INCOME(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries

Millions of yen
2000
1999

Years ended March 31, 2000 and 1999

Thousands of
U.S.dollars
2000

Net sales¥316,444¥336,466$2,985,321

Cost of sales

235,603250,195

2,222,670

80,841

86,271

762,651

60,52059,123570,943

20,321

27,148

191,708

3,774
83(2,659)(9,492)
1,350

4,464
6
(3,269)(2,182)(2,326)35,604783(25,085)(89,547)(6,944)
13,377(3,307)
23,841(65,509)126,199

9,461(3,560)10,352309

89,255(33,585)

5,901

10,661

55,670

(24)

(9)

(227)

¥7,452¥13,171$70,302(Gross profit)
Selling, general and administrative expenses(Operating income)
Other income (expenses):
Interest and dividend income
Equity in earnings of affiliates
Interest expenses
Special provision for retirement benefits
Special charge for pension contribution
Other, net(Income before income taxes)
Income taxes:
Current
Deferred

Minority interests in net income of
consolidated subsidiaries
Net income¥20.00¥19.42

12,736

U.S.dollars

Yen
Net income per share:
Primary
Fully diluted-¥36.83¥34.56

$0.19
$0.18

Note : The United States dollar amounts represent translation of Japanese yen at the rate of ¥106=$1.
The Companies changed its method of accounting for amortization of prior service costs with the contributory pension plan from a cash basis toan accrual basis in order to provide a more appropriate allocating costs of pension costs and to make its financial position sound.
Certain reclassifications of previously reported amounts have been made to conform with current classifications.

‑2‑

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries

Commonstock¥73,694

Years ended March 31, 2000 and 1999
Balance at March 31, 1998
Net income
Effect of change in accounting for income taxes
Conversion of convertible debentures
Stock issued on exercise of warrants
Cash dividends,¥9.00 per share
Bonuses to directors and statutory auditors
Effect of changes in reporting entity
Balance at March 31, 1999
Net income
Conversion of convertible debentures
Stock issued on exercise of warrants
Cash dividends,¥9.00 per share
Bonuses to directors and statutory auditors
Effect of changes in reporting entity
Cumulative translation adjustments
Balance at March 31, 2000

6
4,960

78,660114
10,181¥88,955

Balance at March 31, 1999
Net income
Conversion of convertible debentures
Stock issued on exercise of warrants
Cash dividends,$0.08 per share
Bonuses to directors and statutory auditors
Effect of changes in reporting entity
Cumulative translation adjustments
Balance at March 31, 2000

$742,075
1,076
96,047$839,198

Millions of yen
Additional
paid-in
Retained
capitalearnings¥67,932¥91,877
13,171
6,069
6
6,287
(3,190)(72)(826)
74,225
107,029
7,452
114
12,808(3,301)(62)
33¥87,147

Cumulativetranslation
adjustments-¥111,151

Thousands of U.S.dollars$700,236$1,009,708
70,302
1,076
120,830(31,142)(585)
311$822,142$1,048,594

Note : The United States dollar amounts represent translation of Japanese yen at the rate of ¥106=$1.
The Companies changed its presentation of cumulative translation adjustments from "Investments and other assets" to "Shareholders' equity" in cosolidatedbalance sheets to conform with an amendment to the Japanese Securities and Exchange Law and related accounting regulations.

‑3‑-(4,496)(¥4,496)-(42,415)($42,415)

CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)

Kuraray Co., Ltd. and Consolidated S

Millions of yen
2000
1999

Years ended March 31,2000 and 1999
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization
Write-down of investment securities
Provision for accrued retirement benefits
Gain on sales of properties
Gain on sales of investment securities
Exchange loss on loans receivable to subsidiaries(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Other, net
Net cash provided by operating activities

9,488
(948)
(2,191)
2,559(143)(6,203)
2,686(4,403)25,066

4,979
5,119(9,591)(15,406)
13,544

Cash flows from investing activities(Increase) decrease in marketable securities
Capital expenditures
Proceeds from sales of properties
Payment for purchases of investment securities
Proceeds from sales of investment securities
Other, net
Net cash used in investing activities(2,498)(19,980)
1,443(29,327)
13,474(5,864)(42,752)

7,656(33,497)
3,353(21,695)
12,901(1,949)(33,231)

(594)
7,028
(20,457)
20,364(3,301)3,040

198
31,779(16,113)
9,922(3,190)(6,275)
16,321

Effect of exchange rate changes on cash & cash equivalents

(553)

(182)

Effect of changes in reporting entities

151

1,363

Net decreace in cash and cash equivalents(15,048)(2,185)

Cash and cash equivalents, beginning of period

28,917

31,102

Cash and cash equivalents, end of period¥13,869¥28,917

Cash flows from financing activities(Decrease) increase in short-term bank loans
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from exercise of warrants
Dividends paid
Other, net
Net cash provided by financing activities¥7,452¥13,171

16,76915,557130
1,097(1,512)---

Note: The United States dollar amounts represent translation of Japanese yen at the rate of ¥106=$1.
Cash and cash equivalents included all highly liquid investments with original maturities of three months or less, which can be withdrawn at leastat face amount at any time without penalty.
The companies changed the scope of cash equivalents according to the issuance of accounting standards for preparation of consolidated statementof cash flows, previously the company classified as cash equivalents all time deposits with original maturities of one year or less.
Certain reclassifications of previously reported amounts have been made to conform with current classifications.

-4-

SEGMENT INFORMATION
Industrial segment information(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries

Net sales and Operating income

Year ended March 31,2000
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination
Consolidated total

Year ended March 31,1999
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination
Consolidated total

Year ended March 31,2000
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination
Consolidated total

Net sales tooutside customers¥98,088
144,435
33,29040,631
316,444−¥316,444

Net sales tooutside customers¥103,120
142,071
35,55755,718336,466−¥336,466

Net sales tooutside customers$925,358
1,362,595
314,057
383,3112,985,321−$2,985,321

Millions of yen
Net sales tointersegment
Net sales¥1,817¥99,905
2,592
147,027
338
18,63623,383(23,383)¥ −33,62859,267
339,827(23,383)¥316,444

2,402
3,629
20,960(639)¥20,321

Millions of yen
Net sales tointersegment
Net sales¥1,591¥104,711
1,774
143,845

Operatingincome¥2,686
16,501421
16,874
20,660(20,660)¥ −35,97872,592
357,126(20,660)¥336,466

4,650
3,512
27,349(201)¥27,148

Thousands of U.S.dollars
Net sales tointersegment
Net sales$17,142$942,500
24,452
1,387,047

Operatingincome$26,123
114,7173,189
175,811
220,594(220,594)$ −Note: The United States dollar amounts represent translation of Japanese yen at the rate of ¥106=$1.

-5-Operatingincome¥2,76912,160317,246
559,122
3,205,915(220,594)$2,985,321

22,66034,236
197,736(6,028)$191,708

Industrial segment information(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries
Identifiable assets, Capital expenditure, Depreciation and amortization

Year ended March 31,2000
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination and Corporate
Consolidated total

Year ended March 31,1999
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination and Corporate
Consolidated total

Year ended March 31,2000
Fibers and textiles
Chemical products
Man-made leather, nonwoven
fabrics and fastening materials
Diversified businesses
Total
Elimination and Corporate
Consolidated total

Identifiable
assets¥78,511147,081Millions of yen
Capitalexpenditures¥2,965
9,529

Depreciation andamortization¥3,406
9,327

1,524
5,746
19,764

2,503
1,533
16,76936,83058,278
320,700
183,066¥503,766−−¥19,764¥16,769

Identifiable
assets¥80,160
151,143

Millions of yen
Capitalexpenditures¥3,91922,812

Depreciation andamortization¥3,833
8,212

4,525
2,241
33,497

2,178
1,334
15,55735,73951,665
318,707169,284¥487,991−−¥33,497¥15,557

Thousands of U.S.dollars
Identifiable
CapitalDepreciation andassetsexpenditures
amortization$740,670$27,972$32,132
1,387,557
89,89687,991
347,453
549,792
3,025,472
1,727,037$4,752,509

14,37754,208
186,453−$186,453

Note: The United States dollar amounts represent translation of Japanese yen at the rate of ¥106=$1.

-6-

23,613
14,462
158,198−$158,198

Geographic Segment Information(unaudited)
Kuraray Co., Ltd. and Consolidated Subsidiaries

Millions of yen
Year ended March 31,2000
Domestic (inside Japan)
Outside Japan
Total
Elimination and Corporate
Consolidated total

Net sales tooutside customers¥283,491
32,953
316,444−¥316,444

Net sales tointersegment¥20,436
3,818
24,254(24,254)¥ −Year ended March 31,1999
Domestic (inside Japan)
Outside Japan
Total
Elimination and Corporate
Consolidated total

Net sales tooutside customers¥309,182
27,284
336,466−¥336,466

Net sales tointersegment¥17,920
4,104
22,024(22,024)¥ −Year ended March 31,2000
Domestic (inside Japan)
Outside Japan
Total
Elimination and Corporate
Consolidated total

Net sales tooutside customers$2,674,444
310,877
2,985,321−$2,985,321

Net sales tointersegment$192,792
36,019228,811(228,811)$ −Net sales¥303,927
36,771
340,698(24,254)¥316,444

Operatingincome¥17,862
2,580
20,442(121)¥20,321

Identifiable
assets¥276,542
47,462
324,004
179,762¥503,766

Operatingincome¥22,467
5,121
27,588(440)¥27,148

Identifiable
assets¥273,939
48,699322,638
165,353¥487,991

Operatingincome$168,509
24,341
192,850(1,142)$191,708

Identifiable
assets$2,608,887
447,755
3,056,642
1,695,867$4,752,509

Millions of yen
Net sales¥327,102
31,388358,490(22,024)¥336,466

Thousands of U.S.dollars

Note: The United States dollar amounts represent translation of Japanese yen at the rate of ¥106=$1.

‑7‑Net sales$2,867,236
346,8963,214,132(228,811)$2,985,321