A n n u a l R e p o r t 2002Y e a r E n d e d M a r c h 3 1 , 2 0 0 2

2

Nichicon Corporation specializes in the development, manufacture, and marketing of capacitors, essential

components for a broad range of electronics.

Since 1950 when Nichicon commenced the manufacture of capacitors for power utilities in Kusatsu

City, Shiga Prefecture, the company has been extending its business scope in line with the development

of electronics. The company has grown into four business segments: Capacitors for Electronics,

Circuit Products, Capacitors for Electric Apparatuses and Power Utilities, and Others, which include

capacitor-related products.

During the current term, Nichicon has been implementing organizational reform to establish a business

structure for attaining improvements in our response to customer needs, while at the same time strengthening

business footholds in overseas markets by establishing new companies in Europe and China.

Nichicon is focusing its energies on product development to increase its share of other growing

markets. For example, it strives to accumulate technologies for automobile markets, in which hybrid

cars and other vehicles for the next generation are receiving attention. In addition, attention is being

paid to the information and communications markets, which are seeing the remarkably active development

of new models.

Profile

Nichicon’s R & D group, through the close

collaboration of its related groups, Production

and Sales strives for early commercialization

of new technologies and reinforcement of the

development system in order to meet customer

demands for increased sophistication.

As examples of achievements arising from

such efforts, Nichicon has developed various products and technologies

constituting firsts in Japan and the world. These include microminiature

or ultrahigh reliability products, as well as environmental load

reduction technology, which was put into commercial use.

Nichicon hopes to contribute toward creating an affluent society

while pursuing perfect customer satisfaction through taking full

advantage of advanced core technologies.

Profile

Financial Highlights

To Our Shareholders

Focus on R & D

Review of Operations

Capacitors for Electronics

Circuit Products

Capacitors for Electric Apparatus and Power Utilities

Others

News & Topics

Financial Section

Financial Review

Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

Report of Independent Certified Public Accountants

Consolidated Subsidiaries

Corporate Data

Investor Information

C o n t e n t s

2

3

4

8

10

11

12

13

13

14

16

18

20

21

22

23

33

34

35

35

Forward Looking Statements

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

Cover :

3

¥ 105,8925,0805,3332,988

16,04614,619

157,546119,825

¥ 36.8813.00

1,483.04

76.1%2.5

¥ 121,20110,28011,8986,703

25,92913,026

174,901119,603

¥ 80.0613.00

1,453.78

68.4%5.7

¥ 106,2468,0325,8022,927

20,91910,092

153,748114,626

¥ 34.8912.00

1,367.48

74.6%2.6

¥ 103,12311,54412,3905,377

10,5817,923

142,582111,056

¥ 63.9212.00

1,319.82

77.9%4.9

¥ 105,77415,48916,3377,8249,9207,664

143,608106,861

¥ 93.0114.00

1,270.35

74.4%7.6

$ 797,91838,27640,18422,517

120,910110,157

1,187,144902,910

$ 0.280.10

11.18

76.1%5.7

2002 2001 2000 1999 1998 2002

Yen U.S. dollars

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

At year-end :Total assetsShareholders’ equity

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

Shareholders’ equity ratioRatio of net income to shareholders’ equity

Notes: 1. Amounts less than 1 million yen have been rounded down. 2. The U.S.dollar amounts are provided solely for convenience at the rate of ¥132.71 to U.S. $1, the approximate exchange rate at March 31, 2002. 3. Certain reclassifications of previously reported amounts have been made to conform with current classifications.

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIES Years ended March 31

Financial Highlights

Net Sales(Millions of Yen)

Net Income(Millions of Yen)

Total Assets(Millions of Yen)

Operating Income(Millions of Yen)

Capital Expenditures(Millions of Yen)

Total Shareholders’ Equity(Millions of Yen)

Millions of Yen Thousands of U.S. dollars

120,000

100,000

80,000

60,000

40,000

20,000

01998/3 1999/3 2000/3 2001/3 2002/3

105,774 103,123 106,246

121,201

105,892

8,000

1998/3 1999/3 2000/3 2001/3 2002/3

2,000

6,000

4,000

7,824

5,377

2,927

6,703

2,988

0

180,000

150,000

120,000

90,000

60,000

30,000

01998/3 1999/3 2000/3 2001/3 2002/3

143,608 142,582153,748

174,901

157,546

8,000

16,000

1998/3 1999/3 2000/3 2001/3 2002/3

4,000

12,000

15,489

11,544

8,032

10,280

5,080

0

30,000

25,000

20,000

15,000

10,000

5,000

01998/3 1999/3 2000/3 2001/3 2002/3

9,920 10,581

20,919

25,929

16,046

120,000

100,000

80,000

60,000

40,000

20,000

01998/3 1999/3 2000/3 2001/3 2002/3

106,861111,056

114,626119,603 119,825

4

To Our Shareholders

NICHICON CORPORATIONPresident & C.E.O.

Ippei Takeda

The uncertainty over the future of the economic climate in this country has been amplified over this term (the year ended March 31, 2002). Along with the decline in exports influenced by the concurrent slowdown of the global economy that was triggered by the deterioration of business in IT-related industries, we also have felt the impact of the September 11 terrorist attacks in the U.S. As a result, capital investment in the private sector decreased, the overall unemployment rate increased and individual consumption slumped. In such circumstances, the electronic and electrical industry has also been suffering from the slump in demand and the drop of sales prices at home and abroad. Against the backdrop of this challenging business environment, the entire Nichicon Group, with an eye towards becoming a global winner in the electronic component industry, took action. Efforts were concentrated on cost reduction by cutting fixed costs and improving productivity, reconstruction of the production and sales system both in Japan and overseas and expansion and enrichment of its product development system. This year, we took a great step forward toward effective management, strong competitiveness, and improvement in customer satisfaction through these strategies. However, we cannot deny that fiscal 2002 was a very harsh year in terms of business performance. Consolidated net sales came in at ¥105,892 million. This, a 12.6% decline from the previous term, is the result of a slump in demand that began in the latter part of Q2 and harsh competition at home and abroad. Although there were some positive factors, such as an improvement in productivity and depreciation of the yen in the latter half of the year, resulting profits were not great.The consolidated operating income and the consolidated net income decreased to ¥5,080 million (a decline of 50.6% from the previous term) and ¥2,988 million (a 55.4% decline from the previous term), respectively, owing to the decline in sales and drop of sale prices.

Focusing on increasing management efficiency, competitiveness, and customer satisfaction in this severe business environment.

Achievements of the Current Term

5

Fighting hard in adverse circumstances through organizational reinforcement and directing energies to several promising markets.

Implementation of three business policies in order to be a winner under the current state of adverse circumstances and increase corporate value for our shareholders.

The factories of many listed companies, especially ones in theelectronics and electrical industry, had to be closed or scaled down during the term. While a large number of companies had no choice but to post negative figures, we kept the damage to a minimal level with regards to the decreases in income and profits. In this respect, I would like to say that we have not done so badly. Of course we are taking the reduced income and profits seriously and are determined to make strenuous efforts to bring about growth in sales and profits in the future. However, what I want to put an emphasis on, is the fact that this rather favorable result in the midst of the global IT slump was owing to our desperate efforts over the last few years toward building astructure that can survive in a severe business environment. For example, the introduction of in-house manufacturing of aluminum electrode foil for aluminum electrolytic capacitors, the mainstay products of Nichicon, realized a substantial cost reduction and quality improvement. If it were not for such efforts, the performance of the current term would surely have been worse. In addition, a breakdown of performances by operating segments revealed that while the profits of the Capacitor for Electronics segment decreased by 17.7% and the profits of the Capacitors for Electric Apparatus and Power Utilities segment decreased by 12.6%, the profits of the Circuit Products segment increased by 11.0% over the previous term.This was attributed to our recent efforts toward building up the circuit product business as well as the businesses of aluminum electrolytic capacitors, tantalum electrolytic capacitors, conductive polymer aluminum electrolytic capacitors, and conductive polymer tantalum electrolytic capacitors. Since circuit products are developed as custom products that meet the individual needs of customers, the demand is relatively stable. Moreover, during this term we have been concentrating our energies on markets where future increases in demand for our products are expected, namely, in the automobile and automobile-related appliances markets, the information and

communications markets, the digital household appliancesmarkets, the inverter household appliances markets, etc. Thus, it can be said, that another reason the IT slump experienced in this term did not hit us hard was our dispersion of risk across several markets. In fiscal 2002, we conducted ¥16,046 million in internally funded capital expenditures. Investments were made in rationalization and labor saving moves affecting production and development in the capacitors for electronics segment. This spending is also a part of the measures for reinforcement of Nichicon’s structure. The EBITDA* in the present term stood at ¥19,964 million, a decline from the previous term, but in comparison with the figure at our turning point, the fiscal term ended in March 31, 2000, the amount increased by over ¥4,000 million. When retirement benefits, another large component of non-cash expenses alongside depreciation, are added in, the EBITDA figure for this term reaches ¥22,168 million. This information is presented in more detail in the table and graph below.

Our operating performance for this term was greatly influenced by the trends exhibited by the U.S. economy and exchange rates, not to mention that of the Japanese economy. It is difficult to expect present business and market conditions to take a favorable turn for a while and competition among companies will further intensify. In order to be a winner in these circumstances and increase the corporate value for our shareholders, we set up three business policies in January2002 -Construction of a strong and flexible structure, Reinforcement of a technical development force and Enrichment of the internal IT system.

(Millions of Yen)

Cash-based earnings is the sum of EBITDAand provisions for the reserve for retirement benefits. Capital expenditure trends

Outlook and Strategies for Fiscal 2003

30,000

25,000

20,000

15,000

10,000

5,000

01998/3 1999/3 2000/3 2001/3 2002/3

24,233

9,920

18,944

27,817

22,168

16,046

¥ 7,82416,337

687,664

24,069164

¥ 24,233

¥ 5,37712,390

337,923

20,346545

¥ 20,891

¥ 2,9275,802

1910,09215,9133,031

¥ 18,944

¥ 6,70311,898

1313,02624,9372,880

¥ 27,817

¥ 2,9885,333

1214,61919,9642,204

¥ 22,168

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

Net incomeIncome before income taxes＊Interest expense＊Depreciation and amortization＊EBITDA(＊Total)Provisions for retirement benefit reserve

Total cash-based earnings

¥ 9,920 ¥ 10,581 ¥ 20,919 ¥ 25,929 ¥ 16,046

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

20,891 20,919

25,929

10,581

Capital Expenditures

(¥ million)

(¥ million)

* EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is an indicator used in grasping cash-based earnings.

6

To Our Shareholders

1. Construction of a strong and flexible structureThis was set up with the intention of changing our structure so that it may be strong and flexible, having in mind offensive aspects in addition to defensive aspects, such as cost cutting. We will achieve this goal by not only getting rid of extra weight, but by reinforcing the components, including projects, company bases, the work force, and production facilities as the need arises while keeping the entire structure in an optimal condition. We have been resolutely carrying out necessary investments and at the same time proceeding with the scrap-and-build moves affecting production and sales bases at home and abroad. We will continue these and other activities, such as, organizational reform, in order to maintain an optimal structure. During the term, we inaugurated two divisions: the Aluminum Electrolytic Capacitor Division our mainstay products, and the Circuit Products Division for switching power supplies, for which a further increase in demand is expected in the future. This was the first time we introduced a divisional system. Through this shift from the former vertically divided factory-based system to a division-based system that can control development, manufacturing, and sales in a more unified way, speeding up of product development, cost reduction, shortening of delivery time and enhancements of services became easier to implement. In addition, a restructured sales division was established within the Head Office. Along with this change, two Sales Headquarters in eastern and western Japan were set up: the East Japan Sales Office (former Tokyo Sales Office) and the West Japan Sales Office (former Osaka Sales Office). After these organizational reforms, the field of vision and activities of sales offices were broadened. Their market development and cultivation activities from the company-wide and nationwide point of view started to obtain favorable results.

The production system was also restructured. We reorganized the subsidiary in Singapore as a sales company and transferred its production of aluminum electrolytic capacitors to the subsidiary in Malaysia. The elimination and merger of domestic bases are also underway.

Efforts toward rationalization and cost reduction are certainlyimportant. However, these efforts alone would not significantly increase profits. The most important thing for a manufacturer is

the reinforcement of its technical development force. We are making a large investment in research and development since enormous returns are only possible when the force of advanced research and development becomes one with the rationalization of production and cost reduction. In each term, since March 31, 1997, we have continued to invest about ¥10,000 million to ¥25,000 million in hardware to realize the rationalization of production and cost reduction. Since our past efforts produced certain levels of satisfaction, we plan to enrich other portions in the next term. Specific areas of concentration will be technical and developmental in nature. In order to do so, expenditure in research and development has been increased. We believe that one of the most important factors in research and development is the construction of a system that allows speedy development of products that are based on a close interface and partnership with customers. We are confident that this strategy will increase customer satisfaction. Moreover, we differentiate ourselves from other competitors by focusing on high value-added products. High-ripple and low-impedance aluminum electrolytic capacitor and ultra miniature tantalum electrolytic capacitor are examples. We also direct our energies towards cooperation with universities in fundamental research projects to make provisions for the future.

Today, the electronic component industry is urgently required toestablish a production control system that can support requests for shorter delivery times from its customers, i.e. assembled product manufacturers. In answer to such demand, we are promoting the drastic reconstruction of internal systems, including the production control system, aiming to achieve contradictory goals, the shortening of lead-time and reduction of stock. More concretely, we will soon construct a supply chain management (SCM) system that has been requested by our customers. This system will allow appropriate and speedy information acquisition, and rational production and shortening of delivery times. At the same time, we are now introducing the SAP system and renovate our operational systems, including sales, accounting and information management. Through these, we will establish a system that enables us to quickly react to information in our business operations.

2. Reinforcement of a technical development force

3. Enrichment of the internal IT system

7

Along with the complete enforcement of the above three business policies, we are also strengthening our overseas operations. In particular, we think highly of the construction of new systems that enable us to grasp the trends in customers’ needs and technologies and provide quick answers to customer requests, all from a global view point. We introduced the “Key Account Management System (KAMS)” for our major customers in June 2001. This system is intended to increase customer satisfaction by giving managers a wide range of authority, including price determination, thus providing customers with faster response times. For our major customers, we conduct development, manufacture, and marketing through a user-specific and cross-sectional system, rather than the functionally and vertically divided system. At the same time, we introduced the “Field Account System.” This system is intended to provide quick answers to customer needs on a global basis by assigning a special manager to each growing market sector. We first introduced this system to the automobile-related markets, to which we are devoting our energies.

China is now in the process of establishing a dominant place as “the factory of the world.” Many of our customers have also established their production bases there. In order to fully respond to the needs of such customers, we are reinforcing our activities in the Chinese market. For a start, we are planning to commence the production of aluminum electrolytic capacitors and switching power supplies in the summer of 2002 at NICHICON ELECTRONICS (WUXI) CO., LTD. This manufacturing subsidiary was established in Wuxi, China in December 2001, and will expand its scale step by step. Also, we elevated the Shanghai sub-branch, which was established in 2001, to the status of a sales subsidiary, NICHICON ELECTRONICS TRADING (SHANGHAI) CO., LTD. This company will also commence its sales activities in the summer of 2002. We also carried out the reinforcement of sales in the European market. We established a sales subsidiary in Vienna, NICHICON (AUSTRIA) GmbH in November 2001, and will concentrate on the expansion of sales in continental Europe. In particular, Eastern Europe will be targeted as it is a region which manufacturers of the world regard as increasingly important as a production base in Europe.

Although it is expected that more time is required for the Japanese economy to recover for real and the prospects of Western economies are uncertain, a glimmer of hope has started to appear in some markets. For example, we expect to see the commercialization of third-generation mobile phones and a further opening of the markets for DVDs, PDPs, liquid crystal televisions, and car navigation systems. The fact that our aluminum electrolytic capacitor was introduced for use in a hybrid car in this term will also have a good influence on our future performance. We are planning to raise the sales component ratio of the automobile field to 15% from 10% in the present term. Also, our customers’ inventory adjustments in computers and mobile phones have settled for the time being, and production is expected to increase according to real demand. In either case, we will not just wait for the economy to pick up. Through implementing the aforementioned strategies, we will strive to establish a business structure that enables us to survive in adverse circumstances. In closing, I ask for your continued understanding and support as we take the actions needed to sustain our long-term growth.

To further accelerate overseas operations.

June 28, 2002

Ippei TakedaPresident & C.E.O.

2. Reinforcement of activities in China and establishment of a sales company in Europe

1. Introduction of the Key Account Management System and the Field Account System

8

Today’s market environment changes with bewildering rapidity. The key to competitive advantage depends on how fast one can develop products desired by the market. Speed of development is essential to success! Capacitors have diversified types requiring a variety of manufacturing technologies, materials, structures, and process methods. In order to deal with such a diversified environment, the company has established a research and development system for each product field: Capacitors for Electronics, Circuit Products, and Capacitors for Electric Apparatus and Power Utilities. The high level of specialization in each organization leads to the rapid development of products that accurately respond to the needs of the time. Nichicon has streamlined the development to manufacturing process by utilizing shared basic technologies, thereby realizing a shortening of the time to market place of newly commercialized products and technologies.

Nichicon’s R & D System Etching technologyForming technology

Electrolyte preparation technology

Ultraprecision processing and Assembly technologies

Deposition technologyHot press technologyMetal spraying technologyStructural technology for safety mechanism, etc.

Circuit design technologyMaterial technologyMounting technologyThick film printing and firing technologiesPackaging technology

Molding technologySintering technologyForming technology

Electrolyte layer forming technology

Ultrafine processing and assembly technologiesPackaging technology

Circuit design technologyMounting technology

Material technologySafety measure technology

Harmonic suppression technology

Hybrid ICs

Aluminum electrolytic capacitors

Tantalum electrolytic capacitors

Plastic film capacitors

Switching power

supplies

・�・�・�

・�・�・�

・�・�・�

・�・�・�

・�・�・�

Focus on R&D

Nichicon aims to be a dependable partner for customers in their development of new products. Its R & D system promptly develops and supplies high performance products in a wide range of product fields. This is enabled by an integrated manufacturing system, which includes the development of materials. In addition to promoting the improvement of existing products, the company tries to quickly sense the potential market needs for new products and foresee their commercialization. Utilizing its state-of-the-art technologies, Nichicon vigorously pursues initiatives, which include the development of materials and technologies for practical applications. Its research and development activities stay one step ahead by creating the “essentials” for the present and the future.

9

Nichicon’s unique technologies maintain superiority of its mainstay products.

Aluminum Electrolytic Capacitors

Focus.2 Focus.3

Focus.1The performance of an aluminum electrolytic capacitor is determined by the quality of its aluminum electrode foil and electrolyte. Nichicon possesses top-level capabilities in etching, which enlarges the surface area of foils; forming, which creates a dielectric film on the anode electrode foil; and synthesis of electrolyte. In etching, the development of unique technologies is promoted. This includes the study of solutions and technology for freely etching various pit shapes. The accurate control of etching pits is the key technology for the miniaturization of capacitors. In forming, the optimal design for control of the film thickness on the foil requires precision manufacturing technologies. Nichicon is proud of its forming technologies, which result in foil used in high reliability, and high ripple applications. These foils are considered to be the best in the business. The development of new electrolytes is promoted through studies on molecular structure and chemical synthesis. Producing an electrolyte that achieves new levels of low

impedance, has been the most important development assignment for the company’s R & D group. Success was achieved recently in developing the world’s best low resistance electrolyte, resulting in new products for the marketplace. In addition, the special engineer team from both fields is working to realize the optimization of the interface between electrode foil and electrolyte, so that aluminum electrolytic capacitors can exhibit stable properties. Based on this achievement, a capacitor is being developed with a rated voltage of 750V, which represents the highest capacitor voltage in the world. Nichicon is also at the top of the industry in terms of production technologies such as ultra-precision winding and precision assembly / processing. A resulting example can be seen in Nichicon’s introduction of a 3 mm height chip-type aluminum electrolytic capacitor that is the thinnest in the world. Utilizing high technology, Nichicon is maintaining its leading position in new series introductions and volume of production.

The dielectric of tantalum electrolytic capacitors is tantalum oxide film. The determining property technologies of tantalum electrolytic capacitors are: tantalum powder shaping and sintering, forming of dielectric film and forming of electrolyte layer. In addition to these basic technologies, Nichicon has introduced the use of an assembly processes equivalent to that of semiconductors. This was done in an effort to achieve the ultimate in miniaturization and high capacitance. The company also devotes its energies to the expanded development of conductive polymer tantalum electrolytic capacitors. This type of capacitor employs the use of a high-conductivity heterocyclic compound for the electrolyte. The products based on this unique polymer layer forming technology feature ESR ratings of 1/2 or less compared to conventional manganese dioxide tantalum electrolytic capacitors. Furthermore, in October of last year, the company succeeded in commercialization of a capacitor that employs niobium instead of the more expensive and rare metal tantalum.

Switching power supplies are becoming a new core business for Nichicon. Growth in this segment is based on the development of new products that meet the needs of lower stand-by power consumption, high efficiency, low noise, low voltage and large current. Recently, the company succeeded in developing a revolutionary product that reduced stand-by power consumption to 1/5 (100mW to 20mW in 100V AC) compared to the conventional standard. This was accomplished by incorporating several of Nichicon’s circuit design technologies. A stand-by power sensor circuit, which detects stand-by conditions, was applied. Also included were control circuits for output power that swing output voltage within a certain range and low power supply circuits that reduce the power supply from control ICs. Nichicon is known for taking a leadership position in the industry toward the protection of the environment. The EC Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment, which is to be enforced in June 2004, requires the elimination of the use of lead, hexavalent chromium, cadmium, etc. In April 2001, prior to the introduction of the EC Directive, Nichicon had already achieved the manufacturing of lead-free products.

Tantalum Electrolytic Capacitors Switching Power Supplies

Etching increases the surface area of aluminum foil 200-fold for low voltage, 50-fold for medium to high voltage

Manufacturing line for aluminum electrode foil

10

Sales Breakdown by Operating Segments Regional Sales Breakdown

Nichicon’s operations are divided into four business segments. The Capacitors for Electronics Segment represents plastic film capacitors and positive thermistors, as well as the company’s mainstay, aluminum electrolytic capacitors and tantalum electrolytic capacitors. The Circuit Products Segment includes switching power supplies and hybrid ICs, both of which are developing into a new core business for Nichicon. The Capacitors for Electric Apparatuses and Power Utilities Segment consists of industrial power utilities and other electric power control equipment for buildings, factories and capacitors for railway cars. The Others Segment deals in capacitor-related equipment.

Overseas sales for the term stood at ¥44,884 million, a decline of 12.6% from the previous term. The primary factor contributing to the decline in overseas markets, which occupy 40% of overall sales, were the stagnancy of demand in Western and Southeast Asian markets, and the sluggish climate in the U.S. economy. In the face of such a situation, Nichicon did not take a wait-and-see attitude. During this term we endeavored to establish suggestion, development, and supply systems that meet the various demands of customers for international specialization. As part of such activities, Nichicon’s production and sales capacity was further enlarged by establishing a sales subsidiary in Vienna, Austria, and a production subsidiary in Wuxi, China. This production subsidiary will start operations in August 2002.

Results by Business Segment Regional Sales Breakdown

Capacitors for electronics

Circuit products

Others

Capacitors for electric apparatus and power utilities

Japan

Asia

The Americas

Europe and others

Review of Operations

Net Sales by Product Category(Millions of Yen)

Net Sales by Location(Millions of Yen)

125,000

100,000

75,000

50,000

25,000

01998/3 1999/3 2000/3 2001/3 2002/3

6,923

23,039

55,326

22,938

20,264

20,413

58,684

20,152

24,984

69,873

14,334

24,669

61,008

5,837

6,192

5,880105,774 103,123

106,246 105,891

121,201

5,506

54,415

20,48621,312

1998/3 1999/3 2000/3 2001/3 2002/3

125,000

100,000

75,000

50,000

25,000

0

3,202

15,357

81,531

17,61819,017

5,59622,221

89,30424,658

73,505

2,930 4,102

4,080

2,839105,774 103,123 106,246 105,891

5,683 4,880

121,201

4,956 4.889

77,694 78,171

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

Capacitor-related devicesCapacitor raw materials

Capacitors for electric apparatus and power utilities: 4.6%Plastic film capacitors

Others 2.7%

Capacitors for electronics: 69.4%

Britain, France, Germany

Asia: 23.3%China and ASEAN

The Americas: 13.5%The U.S., Brazil, Mexico

Europe and others: 5.6%

Japan: 57.6%

Circuit products: 23.3%Switching power suppliesHybrid ICs

Capacitors for Electronics

11

The sales of this segment amounted to ¥73,505 million, a 17.7% decline from the previous term. This was attributed to a worldwide decline in demand for information and communications products, the slowdown of the U.S. economy, and a fall in domestic sales prices as part of the deflationary trend in this country. To break through such a situation, Nichicon devoted itself to the development of products with higher added values. We introduced a number of new products to information and communications markets, digital household appliances markets, inverter appliances markets, and automobile-related appliances markets. The following are the new products that were introduced during the term. A CSP (Chip Size Package) type tantalum electrolytic capacitor which is the smallest in the world, with sizes as small as 1.0mm (L) X 0.55 mm (W) X 0.5 mm (H). This is a great accomplishment as it offers a 1/3 reduction in the chip’s circuit board footprint over the product with a facedown electrode that was developed last year. A lead type high capacitance electric double layer capacitor is a capacitor developed as a backup application for CPUs, etc. that require a relatively large current.

This product achieved approx. 1.5 to 2.0 fold increase in capacitance density compared to previous products. An aluminum electrolytic capacitor for electronic flashes was developed for digital cameras and so on, the markets of which are expanding. In addition, for the first time in the industry, a highly reliable aluminum electrolytic capacitor for automobile and automobile-related applications achieved a 105°C and 20,000-hour warranty (four-fold over the conventional standard). A long-life and low-impedance aluminum electrolytic capacitor was brought to the market, realizing a warranted long life of 10,000 hours (double the conventional standard). These long life capacitors also address the need for maintenance free applications in the information and communications industry. Also, a high-voltage (630V) aluminum electrolytic capacitor was developed for inverter appliances. Further, Nichicon succeeded in developing an ultra low ESR (equivalent series resistance) conductive polymer aluminum electrolytic capacitor 50% smaller in volume than conventional products, and, a solid niobium electrolytic capacitor that employs sintered niobium, a new metal material, for the anode electrode, instead of using a rare metal tantalum.

Current Term Review

Outlook for the Next Term

Although the U.S. economy is on the track to recovery, the situation is expected to stay difficult due to the structural problems inherent in Japan. On the other hand, it is estimated that global sales will increase by 12% for PCs, by 24% for DVDs, and by 25% for digital cameras in 2002. A steady increase in demand for the automobile-related appliances market, where Nichicon prossesses strength, is also expected. Nichicon will step up efforts in these promising markets with faster development speed, lower costs, and shorter delivery times.

Sales of Capacitors for Electronics (Millions of Yen)

89,304

73,505

0

20,000

40,000

60,000

80,000

100,000

1998/3 1999/3 2000/3 2001/3 2002/3

77,694 78,17181,531

12

The sales of this segment increased by 11.0% from the previous term, to ¥24,658 million, thanks to favorable sales of products for game consoles and OA-related equipment. The circuit products segment is subdivided into switching power supplies and hybrid ICs, the sales of which amounted to ¥19,578 million (35.8% increase), and ¥5,080 million (34.9% decline), respectively. The circuit products segment has been growing over the last few years as a result of brisk sales in switching power supplies thus becoming a new core business for Nichicon. The sales of this segment rank second to capacitors. Switching power supplies convert AC power to DC sending power to specific circuitry. They are the heart of electronic equipment and are used in various products, including information and communications equipment as well as household electronic appliances. Since Nichicon’s switching power supplies were developed for audio amplifiers they have an excellent reputation, especially for noise control.

Hybrid ICs place a variety of electronic components on a ceramic or resin circuit board to create a module that can perform a certain function. They have been widely used for various applications, such as car electronics, OA equipment, and industrial appliances. Today, these devices are also used in the growing markets of mobile phones and car engine controllers. Several new products were unveiled during the year. A low stand-by power consumption switching power supply is receiving attention as a product that greatly contributes to energy-saving efforts. This unit reduces the power consumption of various types of electronic equipment during the stand-by mode. Sales of this product continue to increase as their popularity rapidly rises. In the hybrid ICs sector, a toner density sensor for color copiers and laser printers was developed. This sensor measures the toner adhesion for an image when it is transferred onto the printing object with electronic printing equipment, so that a stable print quality can be achieved by controlling the use of toners. Also, the company commercialized a remote controlled door lock module that can remotely open/close the door locks of cars. Since this product operates in high-level frequency, it is less prone to influence from noises, which can ensure secure use without being affected by radio waves from mobile phones, etc.

Current Term Review

Outlook for the Next Term

Review of Operations

Circuit Products

The game consoles and OA-related equipment markets are expected to keep expanding. In addition, there are signs of recovery of demand in the information and communications equipment markets, thanks to the entry of next generation mobile phones. Demand in the car electronics sector isalso expected due to increasing use of electronics. Nichicon will strive to receive more orders by further promoting product development, and closely watching market trends and customers’ needs.

Sales of Circuit Units(Millions of Yen)

17,61819,017

22,221

24,658

0

5,000

10,000

15,000

20,000

25,000

1998/3 1999/3 2000/3 2001/3 2002/3

15,357

13

Current Term Review

The sales of this segment were ¥4,889 million, a 12.6% decline from the previous term, owing to sluggish capital investment in the private sector. Several products made their appearance in the market. There was the “low voltage type Geo DRY” , a dry type advanced-phase power capacitor, which adopted nitrogen (N2) gas instead of sulfur hexafluoride (SF6) gas, the emissions of which are regulated due it to being a greenhouse gas. With the launch of this product, Nichicon became the only manufacturer to offer a full lineup of environmentally friendly dry type power capacitors from low to high voltage. In the electric apparatuses sector, the “dry type filter capacitor NUSCAP” was developed for railway cars. This product employs a dry type dielectric and safety mechanism instead of the conventional oil-impregnated type, and realized 1/2 reduction in volume while offering higher reliability and safety. The “EM capacitor” was also developed for use in air conditioners. This product uses thin dielectric film for the safety mechanism. In addition, for liquid crystal backlights and plasma displays (resonance circuits), a surface mount type film capacitor, was also developed.

Also in 2002, the level of capital investments by the private sector is expected to stay low. Although the future of this segment will remain troubled, Nichicon will focus its energies on the development and marketing of products that will contribute to the protection of the environment.

Current Term Review

In this segment, mainly consisting of capacitor-related equipment and the export of raw materials, sales amounted to ¥ 2,839 million, a 30.4% decline from the previous term. This segment develops and manufactures special apparatuses for universities and research institutions applying high voltage and large current control technology. The decrease was a result of the sluggish demand for IT-related inspection and testing equipment, and reductions in orders from government institutions. During this term, the segment delivered a DC power supply for high-frequency transmitter to the National Institute for Fusion Science, administered by the Ministry of Education, Culture, Sports, Science and Technology. A power supply for fusion plasma active control system was delivered to the National Institute of Advanced Industrial Science and Technology.

In the next term, this segment plans to concentrate its attention on receiving orders for accelerator-related equipment, IT-related inspection and testing equipment, and semiconductor manufacturing equipment.

Outlook for the Next TermOutlook for the Next Term

Capacitors for Electric Apparatus and Power Utilities Others

Sales of Capacitors for Electric Apparatusand Power Utilities(Millions of Yen)

Sales of Others

(Millions of Yen)

0

2,000

3,000

4,000

1,000

5,000

6,000

1998/3 1999/3 2000/3 2001/3 2002/3

5,683

4,880 4,956

5,596

4,889

3,202

2,930 2,839

0

1,000

2,000

3,000

4,000

5,000

1998/3 1999/3 2000/3 2001/3 2002/3

4,102 4,080

14

Introduction of a Management System that Closely Adheres to CustomersNichicon introduced the “Key Account Management System (KAMS)” in June 2001, in order to develop a comprehensive customer management system that stays in closer touch with the philosophies of its customers. This system employs an account manager, i.e., a special manager who functions cross-sectionally for major customers, in addition to the conventional regional sales systems. This enables an overall comprehension of the businesses of each customer, including their overseas activities. In addition, it helps to accumulate trends in demand and technologies, which will assist in the development and distribution of products that meet the changing demands of customers.

With its eyes on growing markets, Nichicon introduced another system, the “Field Account System,” to answer the needs of customers that are diversified in each business sector. For example, the automobile account manager, who is in charge of the automobile-related markets, promotes sales of capacitors for car electronics and circuit products according to the recent development trends concerning practical hybrid cars and fuel cell cars, etc. In this way, the company will maintain close connections with important sectors within each industry to offer speedy and careful responses.

In December 2001, Nichicon set up a wholly owned production subsidiary, NICHICON ELECTRONICS (WUXI) CO., LTD., in Wuxi, Jiangsu province, China. This company is slated to move into the production of mainly aluminum electrolytic capacitors and switching power supplies in August 2002. Wuxi is a high-tech center in China that is raising its economic presence by promoting development on a national

level. So far, major companies from 16 countries have come together in this city. From Japan, many manufacturers, including Nichicon’s major customers, have transplanted production facilities to this area. Though Nichicon already has a production base in China, TIANJIN SAMHWA ELECTRIC CO., LTD., NICHICON ELECTRONICS (WUXI) CO., LTD. is its first wholly-owned subsidiary. This factory is also slated to start manufacturing tantalum electrolytic capacitors, with which Nichicon will strengthen its production network in China, which is called “the factory of the world,” in a bid to increase its market share. Following the establishment of NICHICON ELECTRONICS (WUXI) CO., LTD., Nichicon incorporated its Shanghai sub-branch into NICHICON ELECTRONICS TRADING (SHANGHAI) CO., LTD. in June 2002. This company deals with products from NICHICON ELECTRONICS (WUXI) CO., LTD. and SUZHOU TAICON CORPORATION (Nichicon has a 40% interest in the company), as well as imported products from other Nichicon factories located outside of China. This office is aggressively cultivating the Chinese electronics markets.

NICHICON (AUSTRIA) GmbH EstablishedIn November 2001, Nichicon established its 6th overseas subsidiary, NICHICON (AUSTRIA) GmbH, in Vienna, to further reinforce the sales system in Central and Eastern Europe, where NICHICON (EUROPE) LTD. in the U.K. had previously been in charge. There are many electronics and related manufacturers in Central Europe, and various manufacturers are concentrated in Eastern Europe. By setting up a sales base situated near customers, closer attention to demand became possible. Nichicon endeavors to continually expand its business in theEuropean market.

A Production Subsidiary Established in One of the Best High-Tech Industrial Centers in China

News & Topics

15

Nichicon Received 2001 TOYOTA Award for Technology and Development

The aluminum electrolytic capacitor that Nichicon developed for hybrid cars earned the honor of receiving the 2001 Toyota Award for Technology and Development. This award is set up for technologies and products that have remarkably contributed to the development of Toyota automobiles. Among the 24 companies that received the award in 2001, Nichicon was the only electronic components manufacturer. The award was given at a party held in February 2002, where 380 major suppliers

of Toyota in Japan and from overseas were present. The awarded product is the screw terminal type high-ripple current aluminum electrolytic capacitor for hybrid cars. Hybrid cars are fuel-economy and low-emission ecological cars that run with a combination of gasoline engine and electricity. Components of these cars are required to be smaller, lighter, and have higher capacitance, which explains the quest for more sophisticated technologies. The capacitor employs an aluminum electrode foil that has the world’s first amorphous dielectric layer with 20% improved heat resistibility. Furthermore, the product achieved a reduction of 50% in volume and 54% in mass, and yet increased ripple current by 1.6 times. Nichicon accepted this award and is aware that it was given in appreciation of its efforts concerning the development of technologies for cars, and next generation cars in particular, which constitutes an important market.

Introduction of Divisional System and Establishment of Sales Division for Core Businesses

Circuit Products Division

Nichicon inaugurated two divisions, the Aluminum Electrolytic Capacitor Division and the Circuit Products Division, on November 1, 2001, to unify the product development, production, and sales systems that had previously been controlled by respective factories and offices. The Aluminum Electrolytic Capacitor Division controls 5 factories - NAGANO, HOTAKA, OHMACHI, OHNO and TOMITA, - and three subsidiaries - ASAHI ELECTRIC INDUSTRIES CO., LTD., NICHICON (IWATE) CORPORATION and NICHICON (MALAYSIA) SDN. BHD. The Circuit Products Division controls the Power Supply Division and KAMEOKA factory, and two subsidiaries - WAKASA ELECTRIC CORPORATION and DENDO CORPORATION - and is in charge of circuit products, including hybrid ICs and switching power supplies. This divisional system was introduced with the aim of centralizing the operations of respective factories and offices that had been developing and manufacturing per product to speed up the co-development of technologies. This division is also reviewing the system from production to services for faster response times.

A restructured Sales Division was established within the Head Office (Kyoto) to exercise control over sales departments in Japan and overseas as of December 1, 2001. Along with this change in organization, the sales system was reviewed and reinforced by the setting up of two Sales Headquarters in eastern and western Japan - the East Japan Sales Office (former Tokyo Sales Office) and the West Japan Sales Office (former Osaka Sales Office).

Aluminum Electrolytic Capacitor Division

NAGANO FACTORY (Large can type) POWER SUPPLY DIVISION

(Switching power supplies)

KAMEOKA FACTORY (Hybrid ICs)

WAKASA ELECTRIC CORPORATION (Switching power supplies)

DENDO CORPORATION (Switching power supplies)

HOTAKA FACTORY (Electrode foil)

OHMACHI FACTORY (Electrode foil)

R & D

Manufacturing

Sales

Customers

OHNO FACTORY (Miniature-sized type)

TOMITA FACTORY (Electrode foil)

ASAHI ELECTRIC INDUSTRIES CO., LTD. (Miniature-sized type)

NICHICON (IWATE) CORPORATION (Chip type)

NICHICON (MALAYSIA) SDN. BHD. (Miniature-sized and large can type)

16

In the fiscal year ended March 31, 2002, net sales decreased 12.6% to ¥105,892 million. This was affected by the stagnation of Japanese economy, which is still mired in a deflationary spiral, and sluggish sales on a global scale of IT (Information Technology)-related products. Sales of capacitors for electronics decreased 17.7% to ¥73,505 million, being plagued by the worldwide decline in demand for information and communications, and AV-related equipment, etc., caused in part by the slowdown of the U.S. economy. Sales of circuit products rose 11.0% to ¥24,658 million, thanks to the favorable progress in sales of game consoles and OA-related equipment, in contrast to the sluggish sales for information and communications-related equipment. Sales of capacitors for electric apparatus and power utilities fell 12.6% to ¥4,889 million, owing to the doldrums affecting capital investment in the private sector. Overseas sales suffered a decline of 12.6% to ¥44,884 million. This was due in particular to the large drop in U.S. sales, which were affected by the collapse of the IT bubble in that country in the first half of the year and the terrorist attacks in September 2001. Japan accounted for 57.6% of total sales and overseas markets accounted for the remaining 42.4%, representing little change over the amounts of the previous fiscal year (57.7% and 42.3%, respectively). Please see pages 10-13 for more information on sales by geographical region and product segment.

Cost of sales decreased 8.9% to ¥88,451 million despite the increased operating costs and expenses by the addition of retirement benefit liabilities for this term to cost of sales, and selling, general, and administrative expenses, which arose from the lowering of the discount rate in the calculation of retirement benefit liabilities from 2.8% to 2.1% according to the continuing low market interest. This achievement is attributed to our efforts toward the higher-rate in-house production of aluminum electrode foil, a major material of our mainstay products; the company-wide improvement of productivity and cost reduction in materials purchases; and cost reduction by the rationalization of logistics. However, the cost of sales ratio rose 3.4 percentage points to 83.5% due to the drop in sales, the decline in product prices in the face of intense competition, and the rise in depreciation expenses by ¥1,593 million

owing to large capital expenditures in recent years. Selling, general, and administrative expenses decreased 10.7% to ¥12,361 million due to the decline in transportation and other logistics expenses along with the decrease in sales, and cutback of fixed costs including labor costs. However, due to the decline in sales, these expenses rose by 0.3 percentage points to 11.7% of sales.

Though there were some plus factors, such as productivity improvement measures and the yen’s weakness, we could not absorb the decrease in sales, the increase in depreciation expenses, and the increase in the provision for retirement benefit liabilities. The result was a 50.6% decrease in operating income to ¥5,080 million. Operating income fell by 3.7 percentage points to 4.8% of net sales. As concerns non-operating items, interest and dividends income declined from ¥1,197 million to ¥855 million. This was mainly because of lower interest rates and a decline in invested funds as internal resources were used as settlement funds for capital expenditures – including capital expenditures undertaken in the previous term. Furthermore, the continuing weakness of the yen carried over from the previous term resulted in a foreign exchange gain of ¥313 million. On the other hand, we incurred valuation losses of ¥739 million on securities due to a deterioration of the stock market at the end of this term. Due to the above factors, income before income taxes and minority interest decreased 55.2% to ¥5,333 million. The adoption of tax effect accounting resulted in an income tax adjustment of ¥1,532 million. Net income thus decreased 55.4% to ¥2,988 million. This resulted in a return on sales of 2.8%, a decline of 2.7 percentage points. Earnings per share decreased by ¥43.18 to ¥36.88.

Total assets decreased 9.9% to ¥157,546 million. Current assets decreased by 13.5% to ¥78,294 million. This was mainly attributable to the decrease in trade receivables in line with the decrease in sales. Also, inventories were reduced by ¥2,772 million to ¥18,357 million (a 13.1% decline), through the production adjustments corresponding to the decreasing number of orders. Property, plant, and equipment increased 0.9% to ¥57,200 million. The total amount of capital expenditures during this term was ¥16,046 million, a decrease of ¥9,883

Net Sales

Operating Income and Net Income

Financial Position

Cost of Sales, and SG&A Expenses

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

17

million from the previous year. Major elements of these expenditures were ¥5,469 million for aluminum electrode foil production machinery at the Ohmachi and Tomita factories; and ¥5,710 million for the rationalization, labor-saving initiatives, and development of aluminum electrolytic capacitor production machinery. All expenditures were funded internally. Depreciation expenses for the year increased 12.2% from the previous fiscal year to ¥14,619 million. Investments and others declined 20.3% to ¥22,052 million. Current liabilities decreased 45.3% to ¥23,766 million. Trade notes and accounts payable decreased by ¥7,641 million to ¥15,516 million owing to the depletion in inventories caused by the fall in sales. Notes and accounts payable for construction decreased by ¥7,970 million to ¥1,655 million owing to the decrease in capital expenditures. Long-term liabilities rose 18.0% to ¥13,877 million. This was mainly attributable to the lowering of the discount rate used to determine the projected retirement benefit obligation from 2.8% to 2.1% in a manner likewise undertaken in the previous fiscal year because of lower prevailing rates in Japan. Working capital, the difference between current assets and current liabilities, was ¥54,528 million and the current ratio was 329.4%, an increase of 121.2 percentage points from the previous fiscal year’s 208.2%. The year’s retained earnings decreased by ¥632 million to ¥86,100 million partly because of the repurchase and retirement of ¥2,569 million in common stock subsequent to the previous year. The application of market value accounting resulted in the inclusion of ¥1,479 million, a decline of ¥509 million over the previous fiscal year. This figure is obtained by subtracting the book value of securities holdings from their market value, and then further subtracting a provision for deferred taxes. Due to these factors, shareholders’ equity increased ¥223 million to ¥119,825 million. The shareholders’ equity ratio improved 7.7 percentage points from the previous fiscal year to 76.1%. The shareholders’ equity per share climbed 2.0% to ¥1,483.04. The return on equity (ROE) for the year fell 3.2 percentage points to 2.5% and the return on total assets (ROA) fell2.3 percentage points to 1.8%.

The cash and equivalents of the year increased ¥191 million from the previous year to ¥12,949 million. The factors behind this gyration are as follows: Net cash provided by operating activities was ¥19,728 million, an increase of ¥1,903 million (a 10.7% increase). Major causes of this growth were the ¥1,593 million increase in depreciation expenses to ¥14,619 million; the ¥10,157 million decrease in trade receivables; and the ¥3,211 million decrease in inventories. Offsetting these items to some degree were the ¥6,565 million decrease in income before income taxes and minority interest to ¥5,333 million; the ¥9,720 million decrease in trade payable; and the ¥2,650 million increase in tax payments to ¥6,384 million. The net effect of these items was a large increase in operating cash flows. Net cash used in investing activities increased ¥7,146 million to ¥16,487 (a 76.5% increase). This was mainly because of increased payments for acquisition of property, plant and equipment by ¥2,264 million to ¥23,417 million. The major portion of the payments was comprised of investments for the rationalization and labor-saving initiatives in producing capacitors for electronics, and the development of new products. The entire amount was funded using internal resources. Net cash used in financing activities decreased ¥379 million to ¥3,537 million (a 9.7% decline). The primary items accounting for this cash outflow were use of retained earnings to repurchase and retire common stock amounting to ¥2,569 million – the same practice as was undertaken in the previous year – and dividend payments of ¥1,019 million.

Cash Flows

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

18

)

)

)

12,949

14

6,331

25,162

284

31,209

10,563

18,357

2,512

2,690

78,294

5,485

30,022

135,427

480

171,414

114,214

57,200

15,450

2,204

3,237

1,443

282

22,052

157,546

12,758

18

10,078

31,038

312

40,804

11,487

21,129

1,664

2,666

90,526

4,328

27,447

124,818

1,182

157,775

101,081

56,694

22,731

1,673

2,285

1,287

295

27,681

174,901

¥

(

(

(

¥

)

)

)

)

)

)

¥

(

(

(

¥

$

(

(

(

$

97,574

109

47,708

189,600

2,137

235,171

79,597

138,321

18,924

20,268

589,964

41,334

226,219

1,020,474

3,617

1,291,644

860,629

431,015

116,423

16,604

24,389

10,872

2,123

166,165

1,187,144

2002 20022001

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Current assets:

Cash and cash equivalents

Time deposits

Trade receivable:

Notes

Accounts

Less: allowance for doubtful accounts

Short-term investments (Note 4)

Inventories (Note 5)

Deferred tax assets (Note 13)

Other current assets

Total current assets

Property, plant and equipment :

Land

Buildings and structures

Machinery and equipment

Construction in progress

Less: accumulated depreciation

Net property, plant and equipment

Investments and other assets :

Investments in securities (Note 4)

Investments in and advances to unconsolidated

subsidiaries and affiliates

Deferred tax assets (Note 13)

Other

Less: allowance for doubtful accounts

Total investments and other assets

Total assets

ASSETS

Millions of Yen Thousands of U.S. Dollars

(Note 3)

March 31, March 31,

The accompanying notes are an integral part of these statements.

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIESMarch 31, 2002 and 2001

Consolidated Balance Sheets

19

)

9,158

13,999

23,157

9,625

4,766

3,722

6

2,201

43,477

11,126

171

468

11,765

56

—

14,287

17,065

86,732

1,988

180

649

119,603

174,901

6,195

9,321

15,516

1,655

2,239

3,237

—

1,119

23,766

13,330

50

497

13,877

78

14,287

—

17,065

86,100

1,479

1,523

629

119,825

157,546

¥

(

¥

¥

(

¥

) )

$

(

$

46,684

70,235

116,919

12,470

16,875

24,394

—

8,426

179,084

100,445

373

3,746

104,564

586

107,653

—

128,589

648,784

11,144

11,478

4,738

902,910

1,187,144

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Current liabilities:

Trade payable:

Notes

Accounts

Notes and accounts payable for construction

Accrued income taxes (Note 13)

Accrued expenses

Deferred tax liabilities (Note 13)

Other current liabilities

Total current liabilities

Long-term liabilities:

Accrued severance indemnities (Note 8)

Deferred tax liabilities (Note 13)

Other long-term liabilities

Total long-term liabilities

Minority interest

Shareholders’ equity (Note 10) :

Common stock, 2002-no par value, 2001-¥50 par value:

Authorized:

-137,000,000 shares at March 31, 2002

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

Issued:

-81,144,372 shares at March 31, 2002

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

Additional paid-in capital

Retained earnings

Net unrealized holding gains on securities (Note 11)

Adjustments on foreign currency statement translation

Less: treasury stock

Total shareholders’ equity

Total liabilities and shareholders’ equity

LIABILITIES AND SHAREHOLDERS’ EQUITY

�

2002 20022001

Millions of Yen Thousands of U.S. Dollars

(Note 3)

March 31, March 31,

20

105,892

88,451

12,361

100,812

5,080

855

12

313

80

739

90

6

253

5,333

3,853

1,532

24

2,988

36.88

36.72

13.00

81,021

81,367

121,201

97,078

13,843

110,921

10,280

1,197

13

468

90

227

157

260

1,618

11,898

7,051

1,864

8

6,703

80.06

—

13.00

83,734—

¥

(

(

(

(

(

¥

¥

)

)

)

)

)

¥

(

(

(

(

¥

¥

)

)

)

)

$

(

(

(

(

(

$

$

)

)

)

)

)

797,918

666,499

93,143

759,642

38,276

6,439

90

2,358

599

5,568

678

46

1,908

40,184

29,034

11,548

181

22,517

0.28

0.28

0.10

Millions of Yen

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

Yen

U.S. Dollars

(Note 3)

The accompanying notes are an integral part of these statements.

Thousands of U.S. Dollars(Note 3)

20012002 2002

Net sales (Note 14)

Operating costs and expenses (Note 14) :

Cost of sales

Selling, general and administrative expenses (Note 12)

Total operating costs and expenses

Operating income (Note 14)

Other income (expenses):

Interest and dividend income on investments

Interest expenses

Foreign exchange gain, net

Equity in net gains (loss) of affiliated company

Loss on valuation of short-term investments

and investments in securities

Net loss on sales or disposal of property, plant

and equipment

Other, net

Total other income (expenses), net

Income before income taxes and minority interest

Income taxes (Note 13) :

Current

Deferred

Minority interest

Net income

Amount per share:

Net income:

Basic

Diluted

Cash dividends

Weighted average number of shares (Thousands):

Basic

Diluted

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

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2002 and 2001

Consolidated Statements of Income

21

14,287

—

—

—

—

—

—

—

14,287

—

—

—

—

—

—

—

14,287

84,144,372

—

—

—

—

—

—

1,520,000

82,624,372

—

—

—

—

—

—

1,480,000

81,144,372

17,065

—

—

—

—

—

—

—

17,065

—

—

—

—

—

—

—

17,065

565

—

—

—

—

—

2,777

2,693

649

—

—

—

—

—

2,549

2,569

629

(

(

(

(

(

)

)

)

)

)

( )

(

(

(

(

(

(

)

)

—

—

—

)

)

)

)( )

)(

( )

(

(

(

)

)

)

(

(

(

)

)

)

( )

83,839

6,703

1,089

28

2,693

86,732

2,988

1,019

32

—

—

—

2,569

86,100

82,624,372

—

—

—

—

—

—

1,480,000

81,144,372

107,653

—

—

—

—

—

—

—

107,653

—

—

—

—

1,988

—

—

—

1,988

—

—

—

509

—

—

—

1,479

14,979

—

—

—

3,835

—

—

—

11,144

—

—

—

—

—

180

—

—

180

—

—

—

—

1,343

—

—

1,523

1,359

—

—

—

—

10,119

—

—

11,478

128,589

—

—

—

—

—

—

—

128,589

653,544

22,517

7,677

242

—

—

—

19,358

648,784

4,891

—

—

—

—

—

19,205

19,358

4,738

�

�

Number ofshares of

common stock

Net unrealizedholding gainson securities

Adjustments onforeign currency

statement translation

Net unrealizedholding gainson securities

Adjustments onforeign currency

statement translation

Millions of Yen

Common stock

Additionalpaid-in capital

Retainedearnings

Treasurystock

Net income

Cash dividends paid

Bonuses to directors

Increase due to valuation of securities

Adjustments on foreign currency

statement translation

Increase in treasury stock

Repurchase and retirement of

treasury stock

Net income

Cash dividends paid

Bonuses to directors

Decrease due to valuation of securities

Adjustments on foreign currency

statement translation

Increase in treasury stock

Repurchase and retirement of

treasury stock

Net income

Cash dividends paid

Bonuses to directors

Decrease due to valuation of securities

Adjustments on foreign currency

statement translation

Increase in treasury stock

Repurchase and retirement of

treasury stock

Balance at March 31, 2000

Balance at March 31, 2001

Balance at March 31, 2002

Balance at March 31, 2001

Balance at March 31, 2002

Thousands of U.S. Dollars (Note 3)

Number ofshares of

common stockCommon

stockAdditional

paid-in capitalRetainedearnings

Treasurystock

The accompanying notes are an integral part of these statements.

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$

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$

¥

¥

¥

$

$

¥

¥

¥

$

$

¥

¥

¥

$

$

¥

¥

¥

$

$

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2002 and 2001

Consolidated Statements of Shareholders’ Equity

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22

5,333

14,619

90

2,204

855

12

10,157

3,211

9,720

209

25,260

864

12

6,384

19,728

7,689

13,699

23,417

0

920

16,487

85

105

1,019

2,569

31

3,537

487

191

12,758

12,949

40,184

110,157

678

16,608

6,439

90

76,537

24,193

73,242

1,572

190,338

6,511

90

48,104

148,655

57,942

103,226

176,450

4

6,927

124,235

641

794

7,677

19,358

231

26,651

3,669

1,438

96,136

97,574

2002

¥

(

(

(

(

(

(

(

(

(

(

(

　　¥

)

)

)

)

)

)

)

)

)

)

)

11,898

13,026

157

2,880

1,197

13

6,935

4,820

3,997

1,381

20,400

1,172

13

3,734

17,825

2,075

12,095

21,153

2,283

491

9,341

150

65

1,089

2,693

49

3,916

462

5,030

7,728

12,758

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(

(

(

(

(

(

(

(

(

(

(

(

(

(

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)

)

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)

)

)

)

)

$

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(

(

(

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)

)

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20022001

For the years ended March 31,

Millions of Yen

For the year ended March 31,

The accompanying notes are an integral part of these statements.

Thousands of U.S. Dollars(Note 3)

Operating activities:

Income before income taxes and minority interest

Adjustments for:

Depreciation and amortization

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

Provision for accrued severance indemnities

Interest and dividend income

Interest expenses

(Increase) decrease in notes and accounts receivable

(Increase) decrease in inventories

Increase (decrease) in notes and accounts payable

Other, net

Sub total

Interest and dividend income received

Interest expenses paid

Income taxes paid

Net cash provided by operating activities

Investing activities:

Payments for purchase of short-term investments

and investments in securities

Proceeds from sales of short-term investments

and investments in securities

Payments for purchase of property, plant and equipment

Decrease in time deposits

(Increase) decrease in other investments

Net cash used in investing activities

Financing activities:

Payments for purchase of treasury stock

Proceeds from sales of treasury stock

Cash dividends paid

Payments for repurchase of treasury stock

　　for retirement

Other, net

Net cash used in financing activities

Effect of exchange rate changes on cash and

cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

�

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2002 and 2001

Consolidated Statements of Cash Flows

23

Fiscal year-end

March 31 December 31

January 31 February 28 February 28

January 31March 31March 31March 31

December 31 December 31 December 31 December 31 December 31

Country of incorporation

Equity ownershippercentage at

March 31, 2002

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

JapanJapanJapanJapanJapanJapanJapanU.S.A

Hong KongUnited Kingdom

SingaporeMalaysiaTaiwanAustria

100.0%100.0%100.0%100.0%

95.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%

Name

(1) Principles of Consolidation

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

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

1. Basis of Presenting the Consolidated Financial Statements

Effective from the year ended March 31, 2001, NICHICON (SHIGA) CORPORATION, which was set up during the year, NICHICON (FUKUI) CORPORATION and NICHICON (TAIWAN) CO., LTD., which increased their materiality of the impact on the consolidated financial statements, have been included in consolidation. Effective from the year ended March 31, 2002, NICHICON (AUSTRIA) GmbH, which was set up newly during the current year, has been included in consolidation. The remaining 2 subsidiaries as of March 31, 2002 and 1 subsidiary as of March 31, 2001 were not consolidated because their combined assets, net sales, net income and retained earnings in the aggregate were not significant compared to those of the consolidated financial statements of the Companies. For the purpose of preparing the accompanying consolidated

financial statements, all significant intercompany transactions, account balances and unrealized profits among the Companies have been eliminated. The amounts of certain subsidiaries have been included on the basis of fiscal periods ended within three months prior to March 31. The Company had 2 unconsolidated subsidiaries and 12 affiliates as of March 31, 2002 and 1 unconsolidated subsidiary and 11 affiliates as of March 31, 2001. The equity method is applied to the investments in 1 affiliate, Samwha Electric Co., Ltd. since the total net income and retain earnings of the unconsolidated subsidiaries and affiliates other than Samwha Electric Co., Ltd. are not material to the consolidated result of total net income and total retained earnings, respectively. The investments in the remaining unconsolidated subsidiaries and affiliates are carried at cost.

The Company had 16 subsidiaries as of March 31, 2002 and 14 subsidiaries as of March 31, 2001. The accompanying consolidated financial statements include the accounts of the Company and 14 (13 for 2001) of its subsidiaries (together, the “Companies”), which are listed below:

2. Summary of Significant Accounting Policies

NICHICON CORPORATION AND CONSOLIDATED SUBSIDIARIES

Notes to the Consolidated Financial Statements

24

�

(2) Translation of Foreign Currency Financial Statements The accounts of the overseas consolidated subsidiaries are translated into Japanese yen by the methods prescribed under the statements issued by the Business Accounting Deliberation Council of Japan. Under this method, all assets and liabilities are translated at current rates, while shareholders’ equity is translated at historical rates, and revenue and expense items are translated at the average rates during the year. The resulting translation adjustments are shown as “Adjustments on foreign currency statement translation” in the accompanying consolidated balance sheet.

(3) Valuation of Securities Prior to April 1, 2000, securities listed on stock exchanges were valued at the lower of cost or market, cost being determined by the moving average method, and other securities were valued at cost determined by the moving average method. Effective from the year ended March 31, 2001, the Company and its domestic consolidated subsidiaries have adopted the accounting standard for financial instruments issued by the Business Accounting Deliberation Council of Japan on January 22, 1999. Following the standard, securities held by them are classified as held-to-maturity debt securities or “Other securities”, which represents securities other than trading or held-to-maturity debt securities, based on the intent of holding each security for valuation. Held-to-maturity debt securities are stated at amortized cost. Marketable “Other securities” are stated at market value. Adjustments to market value as gains, on one by one basis, are recorded as increase in shareholders’ equity, net of tax, while adjustments to market value as losses, on one by one basis, are charged to income for the year. Costs of their sales are determined by the moving average method. “Other securities” which are not marketable are principally stated at cost, cost being determined by the moving average method. There was no material effect of the adoption of the new accounting standard on the accompanying consolidated statement of income for the year ended March 31, 2001. Based on the examination of the intent of holding each security upon application of the new accounting standard on April 1, 2000, held-to-maturity debt securities with maturities of one year or less from the balance sheet date and highly liquid securities that are similar to bank deposits are recorded in “Short-term investments” in current assets, and other securities are recorded in “Investments in securities” in investments and other assets. As a result, “Short-term investments” in current assets decreased by ¥21,266 million and “Investments in securities” in investments and other assets increased by the same amount.

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

(5) Property, Plant and Equipment Depreciation for the Company and its domestic consolidated subsidiaries is computed by the declining-balance method except for depreciation of buildings acquired on or after April 1, 1998, at rates based on the estimated useful lives of assets. Depreciation of buildings acquired on or after April 1, 1998 for the Company and its domestic consolidated subsidiaries is computed by the straight-line method at rates based on the same above. Depreciation for the overseas consolidated subsidiaries is principally computed by the straight-line method at rates based on the estimated useful lives of assets. The range of estimated useful lives is principally from 7 to 50

years for buildings and structures and from 4 to 11 years for machinery and equipment. Normal repairs and maintenance including minor renewals and improvements are charged to income as incurred. Gain or loss on the disposal of property, plant and equipment is recognized in the period of disposal.

(6) Capitalized Computer Software Costs　　Capitalized computer software costs comprise costs of software used in the Companies’ business. Amortization of capitalized computer software costs, which are included in “Other” in investments and other assets, is computed on the straight-line method over 5 years, as the estimated useful lives.�(7) Foreign Currency Translation　　Prior to April 1, 2000, foreign currencies and short-term receivables and payables denominated in foreign currencies were translated into Japanese yen at the relevant exchange rates prevailing at the respective balance sheet dates, and long-term receivables and payables denominated in foreign currencies were translated at the historical rates prevailing at the transaction dates. Effective from the year ended March 31, 2001, the Company and its domestic consolidated subsidiaries have adopted the accounting standard for foreign currency transactions revised by the Business Accounting Deliberation Council of Japan on October 22, 1999, which required that all monetary assets and liabilities denominated in foreign currencies, whether short-term or long-term, should be, in principle, translated into Japanese yen at the relevant exchange rates prevailing at the respective balance sheet dates. There was no effect of the adoption of the revised standard for the year ended March 31, 2001.

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

(9) Leases　　Where the financing leases do not transfer ownership of the leased property to the lessee during the terms of the leases, the leased property is not capitalized and the related lease expenses are charged to income in the periods in which they are incurred, as per the statements issued by the Business Accounting Deliberation Council.

(10) Accrued Severance Indemnities and Pension Plan　　Under the terms of the retirement plan of the Company, employees of the Company with more than 3 years of service are generally entitled to receive lump-sum payments on the time of retirement. The amount of the retirement benefit is, in general, determined based on the length of service, the cause of retirement, and the remuneration at the time of retirement. The Company also has a contributory pension plan which is interrelated with Japanese government social welfare program which

25

consists of a basic portion requiring employee and employer contributions plus an additional portion established by the Company. The Company and its domestic consolidated subsidiaries have non-contributory pension plan. The amount of severance indemnities to be paid by the Company and its subsidiaries is reduced by the benefits payable under these pension plans. Certain overseas consolidated subsidiaries have defined contribution pension plans. On April 1, 2000, the Company and its domestic subsidiaries adopted the accounting standard for retirement benefits issued by the Business Accounting Deliberation Council of Japan on June 16, 1998. Following the standard, the amount of accrued severance indemnities for employees was provided based on the amount of projected benefit obligations minus pension plan assets at fair value at the end of the fiscal year. Prior to the adoption of the accounting standard, the Company and its domestic subsidiaries unified the accounting treatments of accrued severance indemnities and pension contribution, and the amount of accrued severance indemnities for employees was computed under the same method as the one described above on March 31, 2000. Accordingly, there was no effect of the adoption of the accounting standard for the year ended March 31, 2001. The directors and statutory auditors of the Company are covered by a retirement benefit plan under which the retiring directors and statutory auditors are entitled to receive lump-sum retirement benefits. The amount of such benefits is determined based on the Company’s internal rules. The accrued severance indemnities for the directors and statutory auditors represent the estimated amount to be paid if all directors and statutory auditors retired at the balance sheet dates.

(11) Research and Development Expenses Research and development expenses are charged to income as incurred.

(12) Appropriation of Retained Earnings　　Under the Commercial Code and the Articles of Incorporation of the Company, proposals by the Board of Directors for the appropriation of retained earnings (principally the payment of annual cash dividends) should be approved by a shareholders meeting which must be held within three months after the end of each fiscal year. The appropriation of retained earnings reflected in the accompanying consolidated financial statements for each fiscal year represents the appropriations which were approved by the shareholders meeting and disposed of during that year but which related to the immediately preceding fiscal year. The payment of bonuses to directors is made out of retained earnings instead of being charged to income for the year and constitutes a part of appropriations referred to above.�(13) Net Income and Dividend per Share　　Basic net income per share is based upon the weighted average number of shares of common stock outstanding during each year. Diluted net income per share is based upon the weighted average number of shares of common stock outstanding which includes the dilutive effect of treasury shares for the stock option plans during each year. Cash dividends per share represent interim cash dividends paid and annual dividends declared as applicable to the respective years.

(14) Cash and Cash Equivalents Cash and cash equivalents are composed of cash on hands, bank deposits that are able to be withdrawn on demand and highly liquid time deposits with insignificant risk of changes in value which have maturities of three month or less when purchased.

The Company prepares its consolidated financial statements in Japanese yen. The U.S. dollar amounts included in the accompanying consolidated financial statements and notes thereto represent the arithmetical results of translating yen into dollars at the rate of ¥132.71 to U.S.$1, being the effective rate of

exchange at March 31, 2002. The inclusion of such dollar amounts is solely for the convenience of the reader and is not intended to imply that yen amounts have been or could be readily converted, realized or settled in dollars at the rate of ¥132.71 to U.S.$1 or at any other rate.

3. United States Dollar Amounts

　　Short-term investments and investments in securities held by the Companies as of March 31, 2002 and 2001 were summarized as follows:

4. Short-term Investments and Investments in Securities

Short-term investments:　Government and corporate bonds　Other

Investments in securities:　Equity securities　Government and corporate bonds　Other

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

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

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

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

10,563—

10,563

5,9019,549

—15,450

¥

¥

¥

¥

79,597—

79,597

44,46471,959

— 116,423

$

$

$

$

8,2613,226

11,487

7,49714,934

300 22,731

¥

¥

¥

¥

2002 20022001

Thousands of U.S. Dollars

March 31,

Millions of Yen

March 31,

26

　　Book value and market value information in respect of marketable held-to-maturity debt securities as of March 31, 2002 were as follows:

Millions of Yen Book value

perbalance sheet

Marketvalue Difference

Book value per

balance sheet DifferenceMarketvalue

Thousands of U.S. Dollars

�　Government bonds　Corporate bonds

�　� Government bonds Corporate bonds

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

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

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

�

9,5476,132

15,679

1,5152,6584,173

19,852

9,6296,221

15,850

1,5152,6544,169

20,019

82 89 171

0

4 4

167

¥

¥

¥

¥

¥

¥

71,93746,209

118,146

11,42020,02731,447

149,593

72,56146,874

119,435

11,41819,99631,414

150,849

624 665

1,289

2

31 33

1,256

$

$

$

$

$

$

2,194251

2,445

1,2493,694

4,734260

4,994

9875,981

2,5409

2,549

2622,287

¥

¥

¥

¥

¥

¥( ) )

16,5311,892

18,423

9,41327,836

35,6741,961

37,635

7,43545,070

19,14369

19,212

1,97817,234

$

$

$

$

$

$

Securities whose book values on the accompanying consolidated balance sheet exceed their acquisition costs

Debt securities whose market values exceed their book values on the accompanying consolidated balance sheet

Debt securities whose market values do not exceed their book values on the accompanying consolidated balance sheet

Equity securities Government and corporate bonds

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

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

　　Book values of the securities which are not marketable as of March 31, 2002 were mainly summarized as follows:

　　“Other securities” sold during the year ended March 31, 2002 were as follows:

Other securities:　Equity securities

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

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

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

128¥ 962$

Millions of Yen Thousands of U.S. Dollars

　Government bonds　Corporate bonds

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

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

Millions of Yen Thousands of U.S. Dollars

Millions of Yen

6,577¥ 90 64¥¥

6,7203,500

10,220

¥

¥

4,1004,900

9,000

¥

¥

50,63726,373

77,010

$

$

30,89436,923

67,817

$

$

2003 2004-2007 2003 2004-2007

Proceeds from sales Gain on sales Loss on sales

Thousands of U.S. Dollars

49,562 678 480$$$

Proceeds from sales

Gain on sales Loss on sales

　　The aggregate annual maturities of debt securities included in “Other securities” and held-to-maturity debt securities outstanding as of March 31, 2002 were as follows:

Millions of Yen

Acquisition cost

Book value per

balance sheet Difference Acquisition

cost

Book value per

balance sheet Difference

Thousands of U.S. Dollars

　　Book value and acquisition cost information in respect of marketable “Other securities” as of March 31, 2002 were summarized as follows:

(

((

))

)))

(((

27

Securities whose book values on the accompanying consolidated balance sheet exceed their acquisition costs

Government bonds Corporate bonds

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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,898

7,144 21,042

14,1187,309

21,427

220 165

385

¥

¥

¥

¥

¥

¥

Millions of Yen

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

�

Book value per balance sheet

Market value Difference

Equity securities Government and corporate bonds Other

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

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

2,8962,095

856 5,847

6,3162,153

952 9,421

3,4205896

3,574

¥ ¥ ¥

Millions of Yen

�

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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,1917,038

1,04410,465

1473,427¥ ¥ ¥

�

Acquisition costBook value perbalance sheet Difference

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

)(

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

Other securities: Equity securities Other

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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137

2,5742,711

¥

¥

Millions of Yen

63¥ 29 3¥¥

Proceeds from sales Gain on sales Loss on sales

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

Millions of Yen

Government bonds Corporate bonds Other

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

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

Millions of Yen

6,0402,8002,574

11,414

¥

¥

8,0207,050

— 15,070�

¥

¥

2002 2003-2006

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

28

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

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

6. Derivatives and Hedging Activities

(1) The Companies lease certain machinery and equipment and other assets. Total lease expenses under these leases were ¥76 million ($576 thousand) and ¥117 million for the years ended March 31, 2002 and 2001, respectively.Additional information such as the notional acquisition costs and

accumulated depreciation as of March 31, 2002 and 2001, requested by the Business Accounting Deliberation Council of Japan, to be disclosed as not included in the accompanying consolidated balance sheets was as follows:

7. Lease Commitments

Notional acquisition costs: Machinery and equipment Other

Less: accumulated depreciation

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

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

255 51

306 ( 215 )

91

¥

¥

1,918 390

2,308 ( 1,617 )

691

$

$

404 88

492 ( 286 )

206

¥

¥

2002 20022001

Thousands of U.S. Dollars

March 31,

Millions of Yen

March 31,

　　Notional depreciation expenses for the years ended March 31, 2002 and 2001, which are not reflected in the accompanying consolidated statements of income, were ¥76 million ($576 thousand) and ¥117 million. Notional acquisition costs means the costs which is

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

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

　　The aggregate future lease payments under finance leases as of March 31, 2002 and 2001 were as follows:

Due within one yearDue after one year

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

2002 20022001

Thousands of U.S. Dollars

March 31,

59 32 91

¥

¥

445 246 691

$

$

114 92

206

¥

¥

Millions of Yen

March 31,

Finished goodsWork in processRaw materials and supplies

　　Inventories as of March 31, 2002 and 2001 consisted of the followings:

5. Inventories

2002 20022001

Millions of Yen Thousands of U.S. Dollars

March 31, March 31,

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

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

9,5954,7594,003

18,357

¥

¥

72,29735,86030,164

138,321

$

$

10,8875,2714,971

21,129

¥

¥

29

(2) The aggregate future lease payments under ordinary operating leases as of March 31, 2002 and 2001 were as follows:

263662

¥

¥

195275470

$

$

157

22

¥

¥

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

2002 20022001

Thousands of U.S. Dollars

March 31,

Due within one yearDue after one year

　　The following provided reconciliation of projected benefit obligations to net liabilities for employees’ retirement benefits recognized on the accompanying consolidated balance sheets as of March 31, 2002 and 2001:

8. Accrued Severance Indemnities

Millions of Yen

March 31,

　　The benefit obligations were determined using the discount rates of 2.1% and 2.8% for the years ended March 31, 2002 and 2001, respectively, and the expected rate of return on plan assets was 2.0% for the years then ended. The benefit obligations are attributed to periods based on years of service. Unrecognized past service cost and actuarial differences arising in the years are charged or credited to income for the years when they arise. Amortization of actuarial

differences includes the losses of ¥2,690 million ($20,273 thousand) and ¥2,319 million due to the changes of the discounts rates for the years ended March 2002 and 2001, respectively. The projected benefit obligations of certain subsidiaries are calculated using simplified method, which is permitted to be applied by small size of companies, in conformity with the accounting standard for retirement benefits.

　　Prior to October 1, 2001, the Commercial Code required at least 50 % of the issue price of new shares, with a minimum of the par value thereof, to be designated as stated capital. The portion which was to be designated as stated capital was determined by resolution of the board of directors. Proceeds in excess of the amounts designated as stated capital were credited to additional paid-in capital, which is a component of capital reserve. The Commercial Code was revised and went into effect in October 2001, and the provisions for par value stock were eliminated.

Prior to October 1, 2001, the Commercial Code provided that an amount equal to at least 10 % of cash dividends and other appropriations of retained earnings paid out with respect to each financial period be appropriated as a earned reserve, which is included in retained earnings, until such reserve equals 25 % of stated capital. Effective from October 1, 2001, the revised Commercial Code requires such appropriations until the total amount of capital reserve and earned reserve (collectively, “legal reserves”) equals 25% of stated capital. Legal reserves may be transferred to stated

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

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

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

2002 20022001

Thousands of U.S. Dollars

March 31,

( 26,677 ) 13,592

( 13,085 )

( 23,803 ) 12,937

( 10,866 )

( 201,020 ) 102,422

( 98,598 )

¥

¥

$

$

¥

¥

Millions of Yen

March 31,

As of March 31, 2002, there was no contingent liability.

9. Contingent Liabilities

10. Shareholders’ Equity

　　Components of net periodic benefit cost for the years ended March 31, 2002 and 2001 were summarized as follows:

　　Service cost does not include employees’ contribution of contributory pension plan.

Service cost Interest cost Expected return on plan assets Amortization of actuarial differences Past service cost Net periodic benefit cost

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

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

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

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

2002 20022001

Thousands of U.S. Dollars

March 31,

1,083644242

2,891583

3,793

995568251

3,356—

4,668

8,1634,8471,823

21,7844,390

28,581

¥

¥

$

$

¥

¥

Millions of Yen

March 31,

(

(

)

)

( ) (

(

)

)

11. Unrealized Holding Gains on Securities　　Unrealized holding gains on securities, net of tax in shareholders’ equity as of March 31, 2002 and 2001 are analyzed as follows:

Market value in excess of costs Deferred tax liabilities Unrealized holding gains on securities, net of tax

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

. . . .

2002 20022001

Thousands of U.S. Dollars

March 31,

2,5491,0701,479

3,4271,4391,988

19,2128,068

11,144

¥

¥

$

$

¥

¥

Millions of Yen

March 31,

(

) ( ) (

)

　　Selling, general and administrative expenses in the accompanying consolidated statements of income, for the years ended March 31, 2002 and 2001 consisted of the following:

12. Selling, General and Administrative Expenses

13. Income Taxes　　The Company and its domestic consolidated subsidiaries are subject to a number of different taxes based on income, which in the aggregate indicate a normal effective statutory income tax rate of approximately 42% for the years ended March 31, 2002 and 2001. Foreign consolidated subsidiaries are subject to income taxes of the

countries in which they operate. The reconciliation of the differences between the statutory rate and the effective income tax rates as of March 31, 2002 and 2001 was not disclosed because the differences between the statutory rate and the effective income tax rates were not material.

Freight chargeAdvertisementsEmployees’ salary and bonusesResearch and development expensesOther

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

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

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

1,939217

3,338813

6,05412,361

¥

¥

14,6081,638

25,1506,130

45,61793,143

$

$

2,527246

3,5011,1956,374

13,843

¥

¥

2002 20022001

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

Millions of Yen For the years ended March 31,

capital by a resolution of the board of directors or used to reduce a deficit with the approval of a shareholders’ meeting as before the revision of the Commercial Code. In addition, under the revised Commercial Code, legal reserves may be available for dividends to the extent that legal reserves do not fall below 25% of stated capital, and the Company is allowed to repurchase its own shares to the extent that the aggregate cost of treasury shares does not exceed the maximum amount available for dividends. At the annual general meeting held in June 26, 1998, the shareholders of the Company approved a stock repurchase plan in order that the Company might retire up to 7,000 thousand shares of its common stock through reduction of retained earnings, subject to the approval of the board of directors, in accordance with the Law for Special Exceptions to the Commercial Code Concerning Retirement of Shares of Common Stock. The revised Commercial Code provides that companies may repurchase shares of their common stock under such plans until the dates of the annual general meetings for the financial years ending immediately after the revision of the Commercial Code (June 27, 2002 for the Company). On February 23, 2001, the board of directors declared retirement of 3,000 thousand shares of the common stock through reduction of retained earnings. The Company repurchased and retired 1,520 thousand shares and 1,480 thousand shares of its common stock, and reduced ¥2,693 million and ¥2,569 million of retained earnings, during the periods from the date of the board of directors’ declaration to March 31, 2001 and from April 1, 2001 to the date of the annual general meeting, June 28, 2001,

respectively. At the annual general meeting held in June 27, 2002, the shareholders of the Company approved the plan that the Company may repurchase up to 3,500 thousand shares of its common stock for the aggregate prices up to ¥ 6,500 million ($48,979 thousand) during the period from the date of this annual general meeting to the date of the next annual general meeting in accordance with the provisions of the revised Commercial Code. The shareholders of the Company approved stock option plans as the annual general meeting held in June 1999, 2000, 2001 and 2002. The plan approved in June 1999 allows eligible directors and employees of the Company to purchase up to 116 thousand shares and 204 thousand shares of the Company’s common stock in the aggregate respectively, and the stock options are exercisable from July 1, 2001 to June 30, 2004. The plan approved in June 2000 allows eligible employees of the Company to purchase up to 34 thousand shares of the Company’s common stock in the aggregate, and the options are exercisable from July 1, 2002 to June 30, 2005. The plan approved in June 2001 allows eligible directors and employees of the Company to purchase up to 52 thousand shares of the Company’s common stock in the aggregate, and the options are exercisable from July 1, 2003 to June 30, 2006. The plan approved in June 2002 allows eligible directors, statutory auditors and employees of the Company and eligible members of its major affiliates’ management to purchase up to 180 thousand shares of the Company’s common stock in the aggregate, and the options are exercisable from July 1, 2004 to June 30, 2007.

30

31

(

) (

)

(

) (

)

( ((

)))

(

(

)

)

　　The significant components of deferred tax assets and liabilities as of March 31, 2002 and 2001 were summarized as follows:

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

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

Net deferred tax assets

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

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

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

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

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

4,950453249661858

7,171

1,070402

1,4725,699

¥

¥

37,2983,4171,8734,9786,469

54,035

8,0693,026

11,095 42,940

$

$

4,051 662423—

591 5,727

1,439516

1,955 3,772

¥

¥

2002 20022001

Thousands of U.S. Dollars

March 31,

Millions of Yen

March 31,

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

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

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

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

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

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

2,512

3,237

—

505,699

¥

¥

18,924

24,389

—

37342,940

$

$

1,664

2,285 6

1713,772

¥

¥

2002 20022001

Thousands of U.S. Dollars

March 31,

Millions of Yen

March 31,

Segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2002 and 2001 was presented below:

14. Segment Information

(1) Industry segment　　The Companies’ main operations are manufacturing and distributing capacitors and their related products. The Companies’ operations by business segment for the years March 31, 2002 and 2001are not disclosed since the ratios of business other than main

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

(2) Geographic segment The foreign operations of the Companies for the years ended March 31, 2002 and 2001 were summarized as follows:

Millions of Yen

Sales:　Outside customer　IntersegmentTotal sales Operating costs and expensesOperating income

Assets

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

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

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

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

�

66,96330,95297,91593,036

4,879

115,076

14,30926

14,33514,868 533

11,933

19,4951,446

20,94120,762 179

12,352

¥

¥

¥

¥

¥

¥

¥

¥

¥

5,12511

5,1365,267 131

2,455

¥

¥

¥

— 32,43532,43533,121 686

15,730

¥

¥

¥

105,892—

105,892100,812 5,080

157,546

¥

¥

¥

Year ended March 31, 2002 Japan America Asia Other Consolidated

Elimination and

corporate

　　Unallocated corporate assets which were included in “Elimination and corporate” were ¥28,217 million ($212,623 thousand) and ¥35,891 million as of March 31, 2002 and 2001, respectively.

(3) Sales to foreign customers　　Sales to foreign customers for the years ended March 31, 2002 and 2001 consisted of the followings:

Millions of Yen

America Asia Other Total

America Asia Other Total

America Asia Other Total

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

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

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

Year ended March 31, 2002

14,334—

13.5%

¥ 24,670—

23.3%

¥ 5,880—

5.6%

¥ 44,884105,892

42.4%

¥

Millions of Yen

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

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

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

Year ended March 31, 2001

Thousands of U.S. Dollars

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

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

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

Year ended March 31, 2002

15. Subsequent Event

20,152—

16.6%

¥ 24,984—

20.6%

¥ 6,192—

5.1%

¥ 51,328121,201

42.3%

¥

108,013—

13.5%

$ 185,892—

23.3%

$ 44,307—

5.6%

$ 338,212797,918

42.4%

$

(

)

( (((

))))

Millions of Yen

Sales:　Outside customer　IntersegmentTotal sales Operating costs and expensesOperating income

Assets

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

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

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

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

�

76,11938,660

114,779105,283 9,496

125,803

19,9196

19,92519,011 914

11,502

20,4521,996

22,44821,672

776

12,397

¥

¥

¥

¥

¥

¥

¥

¥

¥

4,7112

4,7135,056 343

2,606

¥

¥

¥

— 40,66440,66440,101 563

22,593

¥

¥

¥

121,201—

121,201110,921 10,280

174,901

¥

¥

¥

Year ended March 31, 2001 Japan America Asia Other Consolidated

Elimination and

corporate

(

) (

)

( ((

)))

Thousands of U.S. Dollars

Sales:　Outside customer　IntersegmentTotal sales Operating costs and expensesOperating income

Assets

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

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

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

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

�

504,583233,226737,809701,050

36,759

867,123

107,819195

108,014112,030

4,016

89,914

146,90110,896

157,797156,446 1,351

93,077

$

$

$

$

$

$

$

$

$

38,61587

38,70239,690 988

18,502

$

$

$

— 244,404244,404249,574 5,170

118,528

$

$

$

797,918—

797,918759,642

38,276

1,187,144

$

$

$

Year ended March 31, 2002 Japan America Asia Other Consolidated

Elimination and

corporate

At the general shareholders’ meeting of the Company held on June 27, 2002, the payments of cash dividends (¥6.5 or $0.05 per share) and directors’ bonuses were approved, which amounted to

¥525 million ($3,957 thousand) and ¥29 million ($219 thousand), respectively.

32

33

We have audited the accompanying consolidated balance sheets of NICHICON CORPORATION and its consolidated subsidiaries as of March 31, 2002 and 2001, and the related consolidated statements of income, shareholders’ equity and cash flows for the years then ended, all expressed in Japanese Yen. Our audits were made in accordance with auditing standards, procedures and practices generally accepted and applied in Japan and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the consolidated financial statements referred to above present fairly the consolidated financial position of NICHICON CORPORATION and its consolidated subsidiaries as of March 31, 2002 and 2001, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles and practices generally accepted in Japan (see Note 1) applied on a consistent basis.

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

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

The Board of Directors NICHICON CORPORATION

ChuoAoyama Audit Corporation

Osaka, JapanJune 27, 2002

Report of Independent Certified Public Accountants

34

Consolidated Subsidiaries

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

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

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

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

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

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

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

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

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

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

Domestic :

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

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

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

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

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

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

NICHICON (SINGAPORE) PTE. LTD.No.6 Ang Mo Kio Industrial Park 2, Singapore 569499TEL.65-64815641 FAX.65-64816485

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

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

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

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

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

Overseas :

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

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

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

Capital Stock : 50million yenProduct line : Tantalum electrolytic capacitors

NICHICON (AUSTRIA) GmbHAm Concorde Business Park C4 Top. Nr20 2320 Schwechat, AustriaTEL.43-1-706-7932 FAX.43-1-706-7933

Capital Stock : 300,000 EURBusiness line : Sales of various kinds of capacitors

Ippei Takeda

Tatou IwasaHirozo Ohshima

Koichi MitsuiHidetaka KurumizawaNobuo Hizaki

Shinzo Matsui

Takashi Hosomi

August 1, 1950

14,286 million yen (As of March 31, 2002)

1,758 (As of March 31, 2002)

Hayao Kato

Sachito UmemuraTadayoshi NishizawaKenji Tai

Keiji Nishihata

Kouzo Yamazaki

President & C.E.O.

Managing Director

Director

Standing Auditor

Auditor

Date of Establishment

Capital Stock

Number of Employees

Board of Directors Factories

35

Corporate Data

Investor Information

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

Head Office

As of 28 June, 2002

5-5, 2-Chome, Hamamatsu-cho, Minato-ku, Tokyo, 105-0013, Japan.TEL.81-3-5473-5611 FAX.81-3-5473-5651

3-2, Sugahara-cho, Kita-ku, Osaka, 530-0046, Japan.TEL.81-6-6362-6421 FAX.81-6-6365-7033

18/F, Nishiki Park Bldg., 4-3, Nishiki 2-chome, Naka-ku, Nagoya, 460-0003, Japan.TEL.81-52-223-5581 FAX.81-52-220-1839

Sendai, Nagano, Shizuoka, Okayama, Fukuoka

EAST JAPAN SALES OFFICE

WEST JAPAN SALES OFFICE

NAGOYA SALES OFFICE

Sales Branches

Offices

3-1, Yagura 2-chome, Kusatsu-shi, Shiga Pref., 525-0053, Japan.TEL.81-77-563-1181 FAX.81-77-563-1208Product line : Capacitors for electric apparatus and power utilities,

Capacitor-applied system and equipment ISO 9001 & ISO14001 certified

15-1, 2-chome, Kitakose-cho, Kameoka-shi, Kyoto, 621-0811, Japan.TEL.81-771-22-5541 FAX.81-771-24-1923Product line : Hybrid ICs, Positive thermistors

‘‘Posi-R’’, Switching power suppliesISO 9001 & ISO14001 certified

4085 Toyoshina, Toyoshina-cho, Minamiazumi-gun, Nagano Pref., 399-8205, Japan.TEL.81-263-72-2830 FAX.81-263-72-7140Product line : Aluminum electrolytic capacitors (Large can type) ISO 9001, QS-9000 & ISO14001 certified

1284-2, Kitahodaka Hodaka-cho, Minamiazumi-gun, Nagano Pref., 399-8302, Japan.TEL.81-263-82-2510 FAX.81-263-82-7536Product line : Electrode foil for aluminum electrolytic capacitorsISO9001 & ISO14001 certified

Yashiro, Ohmachi, Nagano Pref., 398-0003, Japan.TEL. 81-261-21-3200 FAX. 81-261-21-3206Product line : Electrode foils for aluminum electrolytic capacitorsISO 9001 & ISO14001certified

1-11-2 Shimoyoro, Ono-shi, Fukui Pref., 912-0095, Japan.TEL.81-779-66-0333 FAX.81-779-66-0312Product line : Aluminum electrolytic capacitors (Miniature-sized type) ISO 9001, QS-9000 & ISO14001 certified

Nichicon Technology Center, 4 Tsuchifugo, Ohno-shi, Fukui Pref., 912-0805, Japan.TEL. 81-779-65-8000 FAX. 81-779-65-8911Product line : Electrode foils for aluminum electrolytic capacitors ISO 9002 & ISO14001certified

1372 Konan, Suwa-shi, Nagano Pref., 392-0131, Japan.TEL.81-266-52-1816 FAX.81-266-52-3369Product line : Plastic film capacitors ISO 9002 & ISO14001certified

5-5, 2-Chome, Hamamatsu-cho, Minato-ku,Tokyo, 105-0013, Japan.TEL.81-3-3432-6561 FAX.81-3-3437-5769Product line : Development & design for switching power suppliesISO 9001 certified

KUSATSU FACTORY

KAMEOKA FACTORY

NAGANOFACTORY

HOTAKAFACTORY

OHMACHI FACTORY

OHNOFACTORY

TOMITAFACTORY

SUWAFACTORY

POWERSUPPLYDIVISION

Authorized number of sharesIssued number of sharesNumber of shareholdersListings

137,000,000 shares81,144,372 shares9,124First section, Tokyo Stock ExchangeFirst section, Osaka Securities ExchangeFirst section, Nagoya Stock Exchange

(Yen)

Japan Trustee Services Bank, Ltd. (Trust Account)The Mitsubishi Trust and Banking Corporation (Trust Account)Nippon Life Insurance CompanyBank of Kyoto, Ltd.The Fuji Bank, Ltd. The Chase Manhattan Bank N.A. London S.L.UFJ Bank LimitedSumitomo Mitsui Banking CorporationNobuko HiraiThe Chase Manhattan Bank N.A. London S.L. Omnibus Account

Major shareholdersNumber of shares held

Percentage of shares held

6,811,9004,742,2004,238,6123,370,0003,090,0002,717,7002,448,9892,200,0211,915,0001,747,300

8.39%5.84%5.22%4.15%3.80%3.34%3.01%2.71%2.35%2.15%

Common stock price range

3,500

3,000

2,500

2,000

1,500

1,000

1997 1998 1999 2000 2001 2002 As of 31 March, 2002

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

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

Printed on 100% recycled paper.This calalog is printed withenvironmentally friendly soy ink.