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<br />
<br />e
<br />
<br />our main
<br />sales of SNOWTEX for
<br />
<br />In the United States,
<br />
<br />e
<br />
<br />customer. For example, we provide SNOWTEX
<br />after making fine adjustments in terms of particle
<br />size and solution concentration in line with
<br />
<br />e
<br />
<br />e
<br />
<br />market,
<br />semiconductor applications
<br />and high-purity chemicals have
<br />been favorable. In Southeast
<br />
<br />coating
<br />
<br />SUNEVER lor LCD alignment
<br />
<br />Asia, sales have been strong for
<br />electronic-use products and HI-
<br />LITE. We are reinforcing our
<br />sales operations through
<br />enhancement of our office
<br />
<br />intended usage. Regarding SUNEVER, we
<br />participate in the design of liquid crystal displays
<br />by individual manufacturers in order to provide
<br />the optimum product specifications. In this way,
<br />we have won the trust of our customers.
<br />
<br />
<br />in
<br />Singapore. In European markets, we are
<br />concentrating mainly on sales of TEPIC and HI-LITE.
<br />
<br />As part of our strategy to establish overseas
<br />production bases, Nissan Chemical Houston
<br />Corporation (NCHC), a majority-owned subsidiary
<br />of Nissan Chemical America
<br />Corporation, will start
<br />production of organosilicasol in
<br />the United States in August
<br />1997. Organosilicasol is used
<br />
<br />for coating eyeglasses and
<br />optical equipment, and as a
<br />material used in coating. Our
<br />goals are to secure the top share
<br />in the world market by
<br />extending its distribution route
<br />from North America to Europe and to achieve sales
<br />of V2-3 billion by the year 2000.
<br />
<br />line
<br />
<br />HI-LITE products
<br />
<br />A.Concerning basic chemicals, w~ are renowned
<br />for our ability to provide high-quality ammonia
<br />derivative products and are very competitive in this
<br />field. With the aim of retaining this reputation in
<br />the coming century, we set up a "Toyama 21
<br />Project" team at our Toyama plant in 1996 to boost
<br />our corporate strength. Over the next three years,
<br />we will make capital investments totaling over VlO
<br />billion to reduce production and distribution costs,
<br />
<br />us about the medium-term outlook.
<br />
<br />Q.Please tell
<br />
<br />A.We
<br />
<br />this, we need to further enhance
<br />our R&D structure, and strengthen our stable, safe,
<br />and low-cost production system, both of which wil
<br />
<br />Development of new application fields is also
<br />Our HI-LITE, which has been used as a
<br />
<br />important.
<br />disinfectant for swimming pools, is extending its
<br />range of applications to include surface treatment
<br />of compound semiconductors and environmental
<br />
<br />conservation. This is a good example of our efforts
<br />markets for our products by
<br />
<br />Q.can you explain your production and
<br />development systems?
<br />
<br />intend to increase divisional sales to V55
<br />billion in three years, with sales of high-
<br />performance specialty chemicals and export sales
<br />accounting for 50% and 20%, respectively, of total
<br />divisional sales.
<br />In order to do
<br />
<br />to expand the
<br />promoting application development.
<br />
<br />and increase our competitiveness.
<br />In the high-performance specialty chemicals field,
<br />the Central Research Institute, the Research and
<br />Development Center located at our Toyama Plant,
<br />and the Development Sector of our Sodegaura
<br />Plant are cooperating in the development of new
<br />products. Their next achievement is likely to be
<br />ARC, an organic anti-reflective coating. This is
<br />indispensable in producing next-generation 1
<br />gigabyte memories, which require sub-micron-Ievel
<br />processing. ARC is used for lithography processing
<br />Our ARC has
<br />
<br />I
<br />
<br />I
<br />t,
<br />
<br />I
<br />
<br />I
<br />I
<br />
<br />
<br />\
<br />I
<br />!
<br />!
<br />I
<br />I
<br />
<br />,
<br />
<br />
<br />I
<br />!
<br />I
<br />
<br />
<br />I
<br />I
<br />!
<br />1
<br />,
<br />
<br />31st March, 1997, increased by \/994 million ($8,010 thousand),
<br />compared with the former method of computation. Accordingly,
<br />income before income taxes for the said year decreased by \/849
<br />milllion ($6,841 thousand).
<br />
<br />3. Accounting Changes
<br />
<br />Effective 1st April, 1996, the Company changed the method of
<br />Depreciation of property, plant and equipment from the straight-
<br />line method to the declining-balance method.
<br />Due to this change, the amount of depreciation for the year ended
<br />
<br />translation should not be construed as representation that yen
<br />have been, could have been, or could in the future be, converted
<br />into U.S. dollars at that or any other rate.
<br />
<br />4. U.S. Dollar Amounts
<br />
<br />The translation of yen amounts into U.S. dollar amounts is
<br />included solely for convenience and has been made, as a matter of
<br />arithmetical computation only, at the rate of \/124.10 to U.S.$l,
<br />the approximate rate of exchange on 31st March, 1997. The
<br />
<br />s. Marketable Securities
<br />
<br />March, 1996 and 1997 were as follows:
<br />At 31st
<br />
<br />Marketable securit,ies at 31st
<br />
<br />March
<br />Thousands of US$
<br />1997
<br />$23,392
<br />14,061
<br />$37,454
<br />$25,979
<br />
<br />en
<br />1997
<br />\12,903
<br />1,745
<br />\/4,648
<br />\13,224
<br />
<br />Millions of
<br />1996
<br />\/3,092
<br />2,854
<br />\/5,946
<br />\13,855
<br />
<br />Listed securities
<br />Other marketable securities
<br />
<br />Market value of listed securities
<br />
<br />6. Inventories
<br />
<br />March, 1996 and 1997 were as follows:
<br />
<br />Inventories at 31st
<br />
<br />($45.810
<br />
<br />on
<br />
<br />m
<br />
<br />March
<br />Thousands of US$
<br />1997
<br />$112,055
<br />26,471
<br />5,584
<br />$144,110
<br />
<br />March, 1996 and 1997, did not exceed their net realizable values.
<br />
<br />and \/5.685
<br />
<br />million ($38,961 thousand)
<br />thousand), respectively.
<br />
<br />31st
<br />
<br />At
<br />en
<br />1997
<br />\/13,906
<br />3,285
<br />693
<br />\117,884
<br />
<br />7. Depreciation
<br />
<br />Depreciation expense of property, plant and equipment for the
<br />years ended 31st March, 1996 and 1997 amounted to \/4,835
<br />
<br />of
<br />
<br />Millions
<br />1996
<br />\/11,605
<br />2,205
<br />684
<br />\114,494
<br />
<br />Finished products
<br />Raw materials
<br />Supplies
<br />
<br />Total cost of inventories held as of 31st
<br />
<br />help us to increase our competitiveness.
<br />
<br />Sales Breakdown by
<br />Country (FY97) Chemicals Dlv.
<br />
<br />
<br />Changes In Export Ratio
<br />Chemicals Dlv.
<br />
<br />to prevent reflection problems.
<br />shown favorable results in tests carried out by
<br />semiconductor manufacturers, and we are planning
<br />to install a full-scale ARC production system in the
<br />near future. We will also continue to concentrate
<br />
<br />"
<br />
<br />to
<br />
<br />1.00%
<br />
<br />from
<br />
<br />and
<br />
<br />.697%
<br />
<br />to
<br />
<br />1.047%
<br />
<br />ranged principally from
<br />1.57%, respectively.
<br />
<br />and made over-
<br />
<br />8. Short-term Bank Loans
<br />
<br />Short-term bank loans are primarily unsecured
<br />draft maturing generally within one year.
<br />Interest rates applicable to the loans at 31st
<br />
<br />(%)
<br />
<br />
<br />20
<br />
<br />compounds, such as
<br />life science-related field.
<br />
<br />on the development of chiral
<br />prostaglandin, in the
<br />
<br />1996 and 1997
<br />
<br />March,
<br />
<br />5
<br />
<br />\I 3,668 MIllion
<br />\I 1,698 Million
<br />\11,391 MIllion
<br />\I 1,246 Million
<br />\I 339 MIllion
<br />
<br />. Asia
<br />. Weslem Europe
<br />CJ NOl1h America
<br />o Oceania
<br />. Olhers
<br />
<br />'97
<br />
<br />'98
<br />
<br />'95
<br />
<br />'94
<br />
<br />'93
<br />
<br />15
<br />
<br />5
<br />
<br />
<br />o
<br />
<br />10
<br />
<br />marketing
<br />
<br />A. The share of export sales, mainly of high-
<br />performance specialty chemicals, is 17% of total
<br />divisional sales.
<br />
<br />tell us about your overseas
<br />
<br />Q.Can you
<br />strategy?
<br />
<br />1997. The differences between the above statutory tax rate and
<br />the effective tax rates were due principally to the effect of timing
<br />differences in the recognition of certain income and expenses for
<br />tax and financial reporting purposes and expenses not deductible
<br />for income tax purposes.
<br />
<br />9. Income Taxes
<br />
<br />Income taxes applicable to the Company for the two years ended
<br />31st March, 1997, comprised (a) corporation tax, (b) enterprise tax
<br />and (c) inhabitants' taxes, which, in the aggregate. resulted in a
<br />statutory tax rate of approximately 52% for both 1996 and 1997.
<br />However, the effective tax rates (income taxes as a percentage of
<br />income before income taxes) were 57% for 1996 and 56% for
<br />
<br />20
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