Profile
Since its foundation in 1939, Nippon Light Metal Company, Ltd. has been constantly involved withaluminum. Today, Nippon Light Metal is Japan’s sole fully integrated alu­minum manufacturer withactivities ranging from alumina refining to fabrication of various products.
Nippon Light Metal comprises four business segments: Aluminum Ingot and Chemicals,
concerning the production of alumina and related chemicals and alu­minum ingot; Aluminum Sheetand Extrusions, involving the production of sheets and shapes; Fabricated Products and Others,
including the production of transportation-related products, electronic materials, foil and powder;
and Building Materials cover­ing the production of residential and office building materials. Throughthese segments, Nippon Light Metal is actively engaged in a wide range of fields such as automobiles
and railroads, electric machinery and electronics, industrial products and construction.
The NLM Group—the preeminent source of products and services combining aluminum’s
excellent characteristics with new functionality and added value that cater to pressing customer
needs—delivers customer satisfaction and contributes to envi­ronmental protection.
Consolidated FINANCIAL HIGHLIGHTS
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries Years ended March 31
2009

2008

Millions of yen

For the year:
Net sales 
Operating profit (loss) Net loss ¥647,846 ¥554,094 $5,640,782
17,998 (11,892) (121,063)(10,310) (31,442) (320,086)

At year-end:
Total assets 
Net assets 
Short-term borrowings and long-term debt,
including bonds and capital lease obligation 

Net Sales
800

2009
Thousands of
U.S. dollars

540,473
128,997478,571
88,781

4,871,943
903,807224,075

234,0112,382,276

Operating Profit
35

Total Assets
600

30
25

600

450

20
15

400

300

10
5
0

200

150

-5
-10

0

2004 2005 2006 2007 2008 2009

Billions of yen

Years ended March 31-15

2004 2005 2006 2007 2008 2009

Billions of yen

Years ended March 3102004 2005 2006 2007 2008 2009

Billions of yen

As of March 31

Contents
CONSOLIDATED FINANCIAL HIGHLIGHTS ................................................................................................ C2
TO OUR SHAREHOLDERS.............................................................................................................................. 2
SPECIAL FEATURE ......................................................................................................................................... 4
NLM GROUP TOPICS ..................................................................................................................................... 7
CORPORATE GOVERNANCE AND INTERNAL CONTROL SYSTEMS...................................................... 8
NLM GROUP ENVIRONMENTAL ACTIVITIES ........................................................................................... 10
REVIEW OF OPERATIONS ............................................................................................................................. 11
NLM GROUP .................................................................................................................................................... 15
CONSOLIDATED SIX-YEAR SUMMARY ...................................................................................................... 16
FINANCIAL REVIEW ...................................................................................................................................... 18
CONSOLIDATED BALANCE SHEETS ........................................................................................................... 20
CONSOLIDATED STATEMENTS OF OPERATIONS .................................................................................... 22
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS............................................................. 23
CONSOLIDATED STATEMENTS OF CASH FLOWS.................................................................................... 24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS........................................................................... 25
REPORT OF INDEPENDENT AUDITORS ...................................................................................................... 36
OVERSEAS NETWORK .................................................................................................................................. 37
DIRECTORS AND OFFICERS ......................................................................................................................... 38
CORPORATE DATA ......................................................................................................................................... 39

2009

2008

Millions of yen

Per share data (yen and dollars):
Net loss —basic —diluted 
Cash dividends 
Net assets 

2009Thousands of
U.S. dollars¥ (19.00) ¥(57.77) $
—
—
3.00
—
223.61
154.22

Stock information (TSE) (yen and dollars):
Stock price:
High 
Low 

¥

363 ¥
134

(0.59)
—
—
1.57

197 $
60

2.01
0.61

Note: U.S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥98.23 = U.S.$1.00. See Note 2 of the Notes to the Consolidated
Financial Statements.

Net Income per Share
30.0

Net Assets per Share
300.0

Cash Dividends per Share
5.0

250.0

4.0

200.0

0

3.0
150.0
2.0
100.0

-30.0

1.0

50.0
-60.0

Yen

0

2004 2005 2006 2007 2008 2009

Years ended March 31

Net Income per Share = (Net Income - Amount
not attributable to common shareholders) /Average Number of Shares Outstanding

Yen0

2004 2005 2006 2007 2008 2009

Years ended March 31

Net Assets per Share = (Net Assets-Minority
interests in consolidated subsidiaries) /Number of Shares Outstanding at Year-end

Yen

2004 2005 2006 2007 2008 2009

As of March 31

1

To Our Shareholders

Takashi Ishiyama, President and CEO

I am pleased to report on the operating results for
Nippon Light Metal Company, Ltd. and its consolidated group companies for fiscal 2008 (the year
from April 1, 2008, to March 31, 2009).

Overview of Fiscal 2008
During the year under review, the aluminum industry
experienced a significant decline in demand for products
from its principle customers in the automotive, electricaland electronics industries as a result of large-scale production cutbacks and inventory adjustments in these andrelated industries. Sudden fluctuations in raw material
prices, such as a steep first-half rise in the price of aluminum in the first half and the subsequent sharp decline inraw material prices during the second half, exerted alarge influence on corporate earnings.
Given these circumstances, in accordance with thethree-year Mid-Term Management Plan (for the period from fiscal 2007 to fiscal 2009), the NLM Group
strove to create new businesses and products while
proceeding with business structure renewal in linewith the shift in demand. We implemented decisive2

emergency measures, including the streamlining andrationalization of sales, production, distribution andall our business processes to reduce costs and deferred
nonessential capital expenditure to significantly cut
expenses. Despite these efforts, consolidated net sales
were ¥554.1 billion, a significant decrease comparedto the previous year. On the earnings front, we posted
a consolidated operating loss of ¥11.9 billion despite
structural improvements to reduce costs in line withlower sales and losses on inventory valuation due tofalling product prices. Moreover, a loss on the impairment of fixed assets related to the realignment andconsolidation of manufacturing sites in the Building
Materials Operation, business restructuring and otherspecial losses, and additional retirement allowances
for the early retirement program due to workforce downsizing resulted in a ¥31.4 billion consolidated net loss.
Under these circumstances, I regret to announce
that there will be no year-end dividend payment. I
would like to ask for the understanding of our shareholders regarding this decision.
Overview by Business Segment
Sales in the Aluminum Ingot and Chemicals segment
decreased 22.7% year on year, to ¥120.7 billion, while
operating profit fell 91.8%, to ¥0.7 billion.
Sales in the Aluminum Sheet and Extrusions segment
decreased 15.9%, to ¥66.8 billion. Operating results forthis segment deteriorated, resulting in an operating lossof ¥5.7 billion, down ¥7.4 billion from the operating profitof ¥1.6 billion in the previous year.
Sales in the Fabricated Products and Others segment
decreased 10.1% to ¥226.5 billion, and operating profit
decreased 69.9% to ¥4.0 billion.
Sales in the Building Materials segment fell 12.6%, to¥140.1 billion, with an operating loss of ¥7.9 billion, a¥4.9 billion decrease.
Shin Nikkei Structural Improvements
and Share Transfer
In March 2009, we announced the realignment and consolidation of manufacturing sites and additional downsizing in our Building Materials operation.

In August 2009, we transferred a large part of the Shin
Nikkei Co., Ltd., Funabashi Complex (Chiba Prefecture)
production department to the Hokuriku Complex (Toyama
Prefecture) and the Fujioka Plant (Tochigi Prefecture),significantly reducing the scale of operations in line withthe realignment and consolidation of manufacturing sites
in our Building Materials Operation. In addition to the
reduction of 400 employees in the previous year, we downsized our workforce by another 200 employees by the endof June 2009. Furthermore, of the ¥15 billion in special
losses recorded in the period under review, ¥8.5 billion
represents the aforementioned structural reforms.
Furthermore, in July 2009 we announced the decision
to transfer all shares of Shin Nikkei to the JS Group
Corporation, Japan’s largest residential aluminum sash
manufacturer. April 1, 2010, is the target date for thistransfer. However, the transfer amount and other specificconditions have yet to be determined. Consequently, we
have not yet calculated the potential impact of this transfer on future operating performance.
Note: For details, please see the Special Feature section.
Falsification of Fireproof Resin Window
Sash Performance Test Results
In January 2009, Shin Nikkei Co., Ltd., which manufactures and sells resin window sashes for office and apartment building windows, was determined to have falsified
results of performance tests for fireproof resin window
sashes to obtain accreditation by the Ministry of Land,
Infrastructure, Transport and Tourism and was selling fire
retardant sashes that did not conform with the certified
fire retardant materials specifications. These products
were sold from October 2005 to January 2009 and used on
approximately 90 constructed buildings. The products inquestion are currently being upgraded.
The NLM Group takes this issue very seriously and isthoroughly investigating the cause of this problem while
formulating and promoting renewed countermeasures toprevent recurrence, focusing on enhanced complianceawareness and strengthened quality control in the devel-

opment process. At present, we are moving forward with arobust action plan based on these measures.
Outlook for Fiscal 2009
Severe business conditions are expected to continue in fiscal 2009 in the construction, automotive, electrical andelectronics industries and the business environment surrounding the NLM Group. Although we can expect somedeclines in raw materials prices and inventory adjustments by our customers, we must also assume our manufacturing volume will remain at a low level.
Given these conditions, for fiscal 2009 we forecast net
sales of ¥470 billion, operating profit of ¥9 billion andordinary profit of ¥2 billion. Within this severe environment, we will aim for sustainable growth by strengthening
our customer-oriented sales force and accelerating thedevelopment of overseas business. At the same time, we are
striving to strengthen our earnings base by developing
new products and businesses, and cultivating business ingrowth fields. In these ways, we are making a concentrated
Group effort to take advantage of our technological prowess and abundant knowledge of aluminum.
With the transfer of Shin Nikkei, our business will besignificantly transformed in the next fiscal period.
However, we will continue to provide various products to awide range of fields as a comprehensive aluminum manufacturer. As a group, we intend to continue striving toenhance competitiveness in each of our businesses andbecome a strong corporate group through the efforts of all
our employees.
I would like to ask for the continuing support of ourshareholders in these efforts.
August 2009

Takashi Ishiyama
President and CEO
3

Special Feature
An Interview with Takashi Ishiyama, President and CEO

Reemergence of the NLM Group
Question
How was fiscal 2008 for
Nippon Light Metal Co., Ltd.?

Answer : Fiscal 2008 was a year of major upheavals in
the external environment. As I mentioned in my fiscal
2007 message to shareholders, external environment

Funabashi Complex (Shin Nikkei)changes far exceeded our expectations. The global reces-exterior product processing and assembly department tosion caused by the subprime loan crisis created a diffi-

the Hokuriku Complex and Fujioka Plant (Tochigi

cult operating environment for the NLM Group. In

Prefecture).

particular, sales of aluminum for automotive manufac-

At the same time, facing prolonged severity in the busi-

turing decreased considerably as a result lower automo-

ness environment we downsized 200 additional employees

bile sales in Japan and overseas. In the first half, demandin the Shin Nikkei Group. This special measure includes

was firm from the electrical and electronics industries.

the solicitation of voluntary retirement.

However, demand dropped sharply in the second half,

Expenses associated with this series of structural

creating a severe business environment overall. Sluggish

reforms were recorded as a special loss of ¥8.5 billion indemand from the construction field necessitated further

March 2009, comprising ¥6.7 billion for production sitebalanced contraction measures in the Building Materials

realignment and consolidation (¥5.6 billion for facili-

operations.

ties impairment and ¥1.1 billion for retirement benefit
premiums) and ¥1.8 billion for additional workforce

Question

downsizing.

Please discuss the restructuring of Shin Nikkei’s
Building Materials operations.

Question
Related to these structural reforms, in July 2009

Answer : Since April 2008, we have been engaged in

the decision was made to transfer all Shin Nikkei

structural reforms of Shin Nikkei’s business, including

shares to the JS Group. Tostem, which is in the

management structure renovations, financial structuresame industry as Shin Nikkei, is also part of the JS

improvements through capital changes and staff reduc-Group. Please discuss the bold decision to transfer

tions. However, we have decided to realign and consolidate

these shares and the details of the agreement.

our production sites and downsize our workforce further.
First of all, in August 2009 we transferred the casting,

Answer : The decision to transfer all shares of Shin

extruding and coating departments at the Funabashi

Nikkei was as momentous as the NLM Group’s decision toComplex (Funabashi, Chiba Prefecture), our main Kanto

withdraw from the smelting business in the 1980s. In

plant, to the Hokuriku Complex (Takaoka and Oyabe,terms of consolidated net sales and number of employees,

Toyama Prefecture). We also moved residential sash andShin Nikkei represented 30% of our overall business, operating4

on a scale second only to NLM itself. However, operations

systems. The Shin Nikkei brand is scheduled to be contin-

went into the red in fiscal 1997 and in recent years theued.

building materials business has dropped off sharply,
prompting us to conduct structural reforms to support

Question

Shin Nikkei’s business. In our medium-term management

There tends to be a lot of focus on the Building

plans of fiscal 2002–2006 and fiscal 2007–2009, we placed

Materials operations, but can you please elabo-

the highest importance on Shin Nikkei’s structural reforms.

rate on the medium- to long-term management

As you know, we did make some progress in terms ofplan for the entire NLM Group?

improving performance.
However, we felt that on a non-consolidated basis Shin

Answer : In April 2007 we formulated a Mid-Term

Nikkei’s performance improvements and potential for sur-Management Plan for the three-year period from fiscal

vival were nevertheless limited. For those reasons, last year

2007 to fiscal 2009. In terms of our basic policy regarding

we began seeking business alliances and integration withstructural improvement of the Building Materials opera-

other business groups. In April of last year, we announced

tion, as I just discussed we have decided to conduct a sharean aluminum building materials business alliance withtransfer with the JS Group Corporation. However, ourSankyo-Tateyama Holdings, Inc. In March 2009 we received

intention of allocating management resources to three

a capital and business alliance proposal from the JS Group

growth sectors (automotive, electric and electronics andand Tostem, and later we received a capital and businessenergy), the further reinforcement of industry-leading

alliance proposal from Sankyo-Tateyama. We consideredbusinesses and active business development in overseas

each proposal, and were most concerned about protecting

markets remain unchanged.

the Shin Nikkei brand and the employees who worked

The vision for the plan will continue to focus on thethere. The careful consideration of the proposals from thecreation of new business and strong products by making

shareholder and customer perspective resulted in this basic

use of our strength in aluminum technologies. We must

agreement.

create unique products with high

The transfer of business is scheduled for April 1, 2010,

added value, particularly

or sooner, upon approval by the governing agency andgiven the severe market

agreement by both parties. The combination of Tostem andenvironment.

Shin Nikkei is assumed to exceed a 40% share of the resi-

Thanks to the mea-

dential aluminum sash market, and therefore requires thesures we introduced

approval of the governing authorities. For this reason, theduring the previous

exact date and amount of the share transfer has not yet

five-year

been decided.

Mid-Term

After the transfer, Shin Nikkei will be installed under the
JS Group umbrella, integrating its product planning with
Tostem and sharing its distribution, purchasing and information

Special FeatureManagement Plan and the two years afterward, we man-and we intend to enhance the production facilities at three

aged to establish the brand image, “If it’s aluminum, it’slocations worldwide. We have commenced shipments ofNLM.” While reducing costs beginning with personnel

MAXUS™, an aluminum material developed by the NLM

expenses, we aim for growth through market share expan-

Group for containers used to store nuclear fuel. We expect

sion and business alliances with other companies.

sales of this product to grow as nuclear power generation
expands around the world.

Question

In addition, while engaging in the application of alumi-

Please tell us about NLM Group’s plans to reduce

num parts used on standard cars, we are also expanding

personnel expenses.

applications for aluminum parts on hybrid and electricvehicles to meet growing demand for aluminum parts in

Answer : Accepting the fact that we unfortunately for-the automotive industry. Lightweight and recyclable, anwent a year-end dividend payment, we have reduced theaverage of 100 kilograms of aluminum is used to manu-

remuneration of Board members and managers (employ-facture one automobile, although from a cost perspective

ees paid an annual salary) as follows:

its use is limited to certain types. However, as environmen-

In addition, following negotiations with the labortal concerns mount, we view aluminum parts for standard

union, we reached agreement on a decision to reduce thevehicles as a major business opportunity, specifically forbase salaries of general employees, as well.

use in heat exchangers and radiator plates.

1) Reduction in Director Remuneration
Effective February 2009, director, auditor andexecutive officer remuneration was reduced
15%–40%. For example, as CEO, my remuneration was decrease 40%.
2) Management Salary Reduction
Effective February 2009, annual salaries paid tomanagers were reduced an average of 7%.
3) Regular Employee Salary Base Reduction
Effective July 2009, regular employee salaries
were reduced an average of 5%.

These salary reductions are also being implemented inLeveraging our strength as a comprehensive manufacturer, from materials development to production, we areproceeding with the development of battery cables, brakeparts, radiator materials for hybrid vehicles and aluminum
wires for harness lines.

QuestionIs there anything else you would like your shareholders and stakeholders to know?

each Group company.

Answer : The outlook for the global economy will
Question

remain uncertain in fiscal 2009, and the business environ-

Please elaborate on any progress with the mea-

ment is likely to continue to be challenging for NLM.

sures for new product development and growth

However, we also consider this a time of opportunity, andmarkets.

we will endeavor to meet the expectations of our shareholders and stakeholders at the earliest possible opportuni-

Answer : Despite the current environment, sales of Toyoty. I would like to ask for your continued encouragement

Aluminium’s solar cell back-sheets have expanded favorably,and guidance as we pursue these activities.

6

NLM Group Topics

New MAXUS™ Plant Begins Operations
In October 2008, construction of the MAXUS™ production plant for neutron shield material for spent
nuclear fuel casks was completed and began operations at the Niigata Plant of Nikkeikin Aluminium
Core Technology (ACT) Co., Ltd. (Niigata).
New 400-ton hot rolling millOnce again, the importance of nuclear power generation is being recognized in the face of global
warming and surging oil prices, as the demand for casks used to deposit, store and reuse spent nuclear
fuel is growing in the United States and Europe, as well as Japan. In particular, there is significant
growth in demand for the neutron shield material used inside these casks. Nikkeikin ACT has been
jointly developing neutron shield material with NLM’s Chemicals, Metal and Alloy and Rolled Products
Divisions, the Group Technology Center, Toyo Aluminium K.K., Ltd., and all NLM Group companies anddepartments utilizing their technological prowess and expertise. MAXUS™ has superior durability,
and is able to withstand temperatures that caused deformation and peeling in previous products. The
newly constructed facility houses a 400-ton hot rolling mill and ancillary facilities, representing a¥500 million investment with an annual production capacity of 200 tons. We are already receiving
various domestic and overseas product inquiries, with a target of ¥4 billion in 2013.

● March 2009 Marks 70 Years Since the Establishment of NLM ●The Nippon Light Metal Company, Ltd., was established in 1939 by
the Furukawa Electric Co., Ltd., and Tokyo Dento (now Tokyo
Electric Power Company, Inc.) for the purpose of engaging in thealuminum smelting business.
The following year, the Kambara Plant (now Kambara Complex)
began smelting operations, and in 1949, NLM listed its shares on
the First Section of the Tokyo Stock Exchange. In 1952, a capital
Smelting plant in 1940
participation and technical alliance with the Aluminium Company
of Canada, Ltd. (now Rio Tinto Alcan, Inc.), resulted in the continued expansion of demand for aluminum, propelling Japan into aperiod of high growth.
NLM was confronted with a severe management environment
when this momentum decreased significantly as a result of the oilshocks in the 1970s. Fortunately, the Company survived this difficult period and went on to cultivate many secondary and tertiary
products, with March 2009 marking its 70th anniversary of establishment.
NLM is proud to have developed and grown alongside Japaneseindustry
over the past 70 years.
Tokyo headquarters
7

Corporate Governance and Internal Control Systems

1 • Summary of Corporate Governance
NLM considers the development of a corporate governance system one of its most important management priorities, as thissystem helps ensure trust in management by stakeholders, including shareholders, business partners, employees and local
communities.
NLM has adopted an executive officer system. The Board of Directors consists of 11 directors, of whom two are outside
directors. This system enables agile management and sufficient deliberation by the Board of Directors. To clarify the roles
and responsibilities of directors and executive officers and ensure that their tasks are conducted appropriately, their term ofoffice is set to be one year. Thirteen Board of Directors meetings were held in fiscal 2008.
To examine important matters that affect the entire Group from multiple perspectives, NLM has set up an Executive
Committee under the Board of Directors. This committee consists of the president and CEO, senior executives and executive
officers and directors of subsidiaries who concurrently serve as NLM directors. The Executive Committee meets at least twicea month.
NLM has also adopted a statutory auditor system. The Board of Statutory Auditors consists of five statutory auditors, ofwhom three are outside auditors. Auditors are independent and play a key role in corporate governance by attending Boardof Directors and other important internal meetings.

NLM’s CORPORATE GOVERNANCE STRUCTURE
General Meeting of Shareholders
Appointment / removal

Audit reports

Appointment / removal

Directors
Outside directors

Audit reports

Board of Directors
Appointment/ removal

Accounting
auditorAppointment / removal

Accounting
audit

President and CEO

Audit bystatutory
auditors

Executive Committee
Executive officers
Reports andproposals

Operations,subsidiaries and affiliates
Internal
audit

Information exchange

Board of
Statutory
Auditors

Appointment / removal

Subcommittees under the
Executive Committee• Compliance Committee• Internal Control Promotion Ofﬁce• Quality Committee• Environment Committee, etc.

Auditing Office

Statutory
auditors
Outsideauditors

Information exchange

Audit reports/ Information exchange

Support Systems for Outside Directors and Outside Statutory Auditors
The Planning Department and the Legal Department, which jointly serve as the secretariat for the Board of Directors, circulate preparatory handouts to directors and auditors. The secretariat also elaborates on issues of particular importance prior to meetings.
8

The Auditors Office provides staff to assist the auditors.
Accounting Audits
In fiscal 2008, Ernst & Young ShinNihon LLC conducted accounting audits based on the Companies Act and the Financial
Instruments and Exchange Act of Japan.
2 • Summary of Implementation of Internal Control Systems
To fulfill its corporate governance obligations, NLM takes as another management priority the development of internal
control systems for all NLM Group employees. Such systems affect all of NLM’s business processes, ensuring risk management,compliance with laws and ordinances and ongoing work efficiency.
At a meeting on May 17, 2006, the Board of Directors resolved a basic policy on the implementation of the Internal
Control Systems. At the same time, the Internal Control Office was established under the Executive Committee to developinternal control system infrastructure.
Establishment of the Compliance Code and the Internal Whistle-Blower System
In July 2004, NLM established the Compliance Committee, chaired by the president and CEO, to clarify its corporate social
responsibility and to implement effective internal compliance systems. On April 1, 2006, NLM also established the Group
Compliance Code, which is posted on the Group Intranet. At the same time, a leaflet containing this code was distributed to
all members of Group companies. Concurrently, an internal whistle-blower system was created.
NLM considers important the creation of an atmosphere that fosters the frank exchange of opinions among officers andemployees about workplace compliance and encourages its top-of-mind significance. Each year, NLM holds more than 900
compliance meetings that are attended by employees.
Establishment of Group Risk Management Regulations
As part of its risk management system, in May 2006 NLM established the Group Risk Management Regulations. These
regulations specify departmental responsibilities and risk management guidelines, segmented by risk significance into 1)
product and service defects, 2) environmental problems, 3) disasters (natural and accidental) and 4) information systemproblems.
Establishment of Regulations Concerning the Preservation and Management of Documents Containing
Important Decisions
In accordance with corporate regulations, NLM appropriately stores and manages information on the execution of duties
by directors, which is disclosed to statutory auditors upon request. On May 29, 2006, NLM established the Regulations
Concerning the Preservation and Management of Documents Containing Important Decisions. These regulations establish
criteria for the storage and management of documents at each NLM Group company, including those concerning Executive
Committee decisions, committee minutes and departmental decisions, such as approval applications, data and addenda.

9

NLM GROUP ENVIRONMENTAL ACTIVITIESBasic Principle

We shall comply with relevant laws and ordinances andshall take action independently and actively on global environmental problems.
NLM Group’s management policies reflect the recognition that initiatives to tackle global environmental problems are vital.
Basic Policy for Environmental Issues

Environmental issues are no longer confined to one locality,and have been spreading and worsening to the extent that theycan endanger the global environment and the very existence ofhuman beings.
Actions and dedication are required for the national government, local governments, citizens and companies to construct asustainable, recycling-oriented economy and society capable ofcoexisting with the environment preserved Earth. With this mission strongly in mind, the NLM Group seeks a harmonious coexistence with the natural environment in every aspect of its corporate
activities.
These efforts eventually lead to sound corporate activities
together with protecting the interests of shareholders, customers,
employees and local communities, which are the basis of NLM’sexistence. We also endeavor, as decent corporate citizens, to realize a truly affluent society through an environment-orientedsocial contributions.

Action Guidelines
1. Compliance with Environment-related Laws and Regulations
		We comply with laws and regulations for the protection of the environment.
2. Improvement of Energy Efficiency and Reduction of CO2 Emissions
		We endeavor to improve the energy efficiency and reduce CO2 emissions byimproving efficiencies of production processes and equipments raising productivity and rationalizing logistics.
3. Facilitating Resource Savings and 3R campaign
		We make efficient use of all production resources including aluminum, anddisseminate the 3R (reduction, reuse and recycling) campaign throughout
the Group.
4. Business Activities in Consideration of Environmental Impacts
		Prior to determining where to build a production facility or what products todevelop, we take measures their impacts on the environment based on scientific evaluations. We also make every effort to reduce the environment evenin existing business activities.
5. Development of Technologies Contributing to Environment Protection		Our proactive product, process and other technology developments takeadvantage of aluminum’s characteristics to reduce environmental impact.
We contribute to environmental preservation by publicizing these results andproviding products that incorporate them.

Voluntary Action Plan for Reduction of Greenhouse Gas Emissions / NLM GroupThe NLM Group’s Voluntary Action Plan to Reduce
Greenhouse Gases

Reduce the ratio of greenhouse gas emissions to net
sales by 10% by 2010 compared with in1990
Greenhouse Gas Emissions per Unit of sales(t-CO2/million yen)

Greenhouse Gas Emissions(thousand-t/t-CO2)

2.5

10%

2,000

reduction
1,600
1.90

1.94

1.88

1.99

2.07

2.18

2.11

2.0

2.11

In 2005, the NLM Group formulated an action plan to promote thevoluntary and proactive environmental initiatives advocated in
the Company’s basic policy. Based on the Kyoto Protocol, the voluntary action plan is focused on the reduction of greenhousegases, which contribute to global warming functioning as a comprehensive indicator for several environmental parameters,
including atmospheric and water quality.
In fiscal 2008, we reduced our greenhouse gas emissions. This
reduction was significantly influenced by decreased manufacturing activities resulting from the economic recession in the second
half of the fiscal year. Furthermore, net sales declined, and emissions per unit of sales decreased slightly.
Despite marked changes in the business environment, the NLMGroup will continue striving to reduce greenhouse gas emissions
and reduce emissions per unit of sales.

NLM Group Voluntary Action Plan for Reduction ofGreenhouse Gas Emissions

1.5

1,200

1.0

800

0.5

400

0.0

1990

2003

2004

2005

2006

2007

2008

2010

(FY)

* Data for 2006 has been revised to reflect the criteria changes for evaluation of greenhouse gas emissions
at some sites.

100Review of Operations

Aluminum Ingot and Chemicals■ Consolidated Net Sales

Profile Alumina and Chemicals Operations produce aluminum hydroxide, alumina andchemicals used in various fields. These products are used as raw materials for flame retardants,
ceramics and other products and as industrial materials in paper and pulp manufacturing.
Aluminum and Aluminum Alloy Operations manufacture primary and secondary aluminumalloys and enjoy an excellent reputation for the development of high-performance alloys in
response to customer requirements. High-purity aluminum manufactured at Japan’s only
aluminum smelting plant is used as a raw material for electronic materials and other products.
■ Consolidated Operating Profit■ Principal Products(Millions of Yen)

(Millions of Yen)

160,000

12,500• Aluminum• Aluminum hydroxide• Chemicals (chemical products)• Caustic soda
• Chlorinated chemical products• Aluminum ingot• Aluminum alloys■ Net Sales

10,000120,000

7,500

80,0005,000

40,00002,500’05 ’06 ’07 ’08 ’09

0’05 ’06 ’07 ’08 ’09■	Overview of results for fiscal 2008
In the Aluminum Ingot and Chemicals operations, in terms ofalumina, shipments of aluminum hydroxide for building materials
were sluggish, while demand for alumina for fire-retardantmaterials, electrical machinery and electronics and alumina andaluminum hydroxide dropped off in the second half after a bullish
first half. Furthermore, the exchange rate caused a decrease inexports, resulting in an overall decline in sales.
In terms of chemicals, product shipments were strong in the first
half, led by the tight supply and demand situation for caustic soda.
However, in the second half demand for items such as organic andinorganic chlorine products stagnated as business conditions
worsened, resulting in lower sales. These factors resulted in lower
overall sales compared to the previous year.
In terms of profits, in response to the rising price of materials
such as bauxite and raw salt, we revised the price of alumina,
aluminum hydroxide and caustic soda products while promoting

Alumina

120,725
Millions of Yen

21.8%

the sale of value-added products, but production volumes
decreased, owing to deterioration in the quality of bauxite andchanges in the service period for equipment and machinery raised
depreciation expenses. This contributed to a sharp drop in profits.
In the Aluminum Ingot operations, demand for use in electricalwires was firm, but our primary products for the automobile
industry were affected by significant production cuts and inventory
adjustments by our customers. Secondary alloy product sales
declined substantially, leading to an overall decrease in shipments,
and product prices fell sharply in the second half, resulting in asteep decline in sales.
In addition to decreased sales, we recorded an inventory
valuation loss due to a sudden drop in the aluminum ingot market,
resulting in extremely severe conditions in these operations.
As a result, Aluminum Ingot and Chemicals sales decreased
22.7%, or ¥35,464 million, to ¥120,725 million, and operating
profit declined 91.8%, or ¥8,424 million, to ¥748 million.

Aluminum alloys

11

Review of Operations

Aluminum Sheet and Extrusions■ Consolidated Net Sales

Profile The NLM Group’s aluminum sheet and extrusions are used in a wide range ofmarket sectors, for instance for automotive parts and railway cars in the transportindustry and for semiconductor and liquid crystal manufacturing equipment andphotosensitive drums in the electrical machinery and electronics industries. The Groupapplies technologies and expertise accumulated over many years to actively develop
products that meet user needs and provides customers with high-performance sheets andextrusions.
■ Net Sales(Millions of Yen)

■ Applications■ Principal Products(Millions of Yen)

• Automobile• Automobile suspension parts • Lead-free cut aluminum alloy• Quick freezing coagulated powder extruded materials• High-intensity molded aluminum sheet• Large structural materials for railway rolling stock• Truck body parts• Thick plate for semiconductor and LCD manufacturing
equipment, Foil stock • Photosensitive drum materials• Printing roll • Industrial materials• Aluminum honeycomb panel • Scaffolding

8,000

60,0004,000

40,0000

20,000-4,000’05 ’06 ’07 ’08 ’09-8,000• Transport• Electronics’05 ’06 ’07 ’08 ’09• Industrial• Building materials andinfrastructure materials■ Overview of results for fiscal 2008
In the Aluminum Sheet operations, shipments for building
materials were sluggish. Following strong first-half performance,
sales of thick sheets for semiconductor and LCD manufacturing
equipment and foil stock for Electrolytic Capacitor operations
declined significantly in the second half, as customers reduced
production levels and adjusted inventories.
While the continued high price of fuels and side materials andthe price of aluminum ingot and products showed signs of decline,
we were forced to sell at a lower price products made fromaluminum ingot procured at high prices, resulting in a vicious
circle that drove down earnings sharply.

Aluminum coil

12

12.0%

■ Consolidated Operating Profit

80,000066,766

Millions of Yen

In the Aluminum Extrusion operations, we began mass
production of automotive parts at our second plant in China,
Nikkei (Shanghai) Body Parts Co., Ltd., as we worked to cultivate
new demand. However, in the mainstay Japanese market, demandand sales volumes in almost all areas were sharply lower due toreduced production and decreased capital expenditure by domestic
customers in the automotive, electrical machinery and electronics
industries, creating a severe profit environment.
As a result, Aluminum Sheet and Extrusion sector sales
decreased ¥12,609 million, or 15.9%, to ¥66,766 million. Operating
results also worsened, declining ¥7,367 million from an operating
profit of ¥1,630 million in the previous year to an operating loss of¥5,737 million.

Extrusion shapes

Review of Operations

Fabricated Products and Others■ Consolidated Net Sales

Profile The NLM Group includes a number of companies that handle distinctive fabricatedproducts. In particular, Toyo Aluminium’s aluminum foil and aluminum powder and paste,
Nippon Freuhauf’s van and truck bodies and Nikkei Panel System’s commercial refrigerator
and freezer panels enjoy an excellent reputation for quality and are market share leaders intheir respective fields. In addition, the Group provides familiar consumer products, including
anodized aluminum foil for aluminum electrolytic capacitors, automotive parts,
landscaping products, containers and packaging materials.

226,543
Millions of Yen

40.9%■ Consolidated Operating Profit■ Applications■ Principal Products(Millions of Yen)

(Millions of Yen)

• Automobile

280,000

17,500• Powder and paste • Cast and forged parts for automobiles• Heat exchangers for automobiles• Van truck bodies and trailers• Aluminum foil for electrolytic capacitors • Clean rooms• Anodized foil for electrolytic capacitors• Landscape engineering products• Solid truss structural materials (Aluminum truss)• Plant package for communication base stations• Aluminum foil • Panels for commercial refrigerators and freezers■ Net Sales

10,500140,000

7,000

70,0000• Transport• Electronics

14,000210,000• Building materials
and infrastructurematerials

3,500’05 ’06 ’07 ’08 ’09

0’05 ’06 ’07 ’08 ’09■ Overview of results for fiscal 2008
Following is a summary of the major sectors in the FabricatedProducts and Others operations.
In the aluminum foil and fine powder products sector, sales ofaluminum foil, primarily for solar cell back sheets andpharmaceuticals packaging, were favorable in the first half. In thesecond half, demand for high-purity aluminum foil for electrolytic
capacitors dropped sharply, and sales declined in almost all fields.
On the whole, robust first-half sales led to higher sales compared tothe previous year.
In the aluminum powder products sector, shipments ofaluminum paste used for automobile paint were significantly lower
due to lackluster growth in related industries, while robust firsthalf performance of functional ink for solar cells turned lacklusterin the second half in reaction to worsening market conditions in
Europe. As a result, net sales for this sector were lower compared tothe previous year.
In the Transport-Related sector, sales in the van and truck
outfitting business fell in reaction to the end of advanced demandcaused by the strengthening of exhaust gas regulations, as well as
reduced capital expenditure. Shipments of capacitors for car air
conditioners used in mini vehicles were firm, but exports dropped
in the second half, resulting in lower net sales in this sector
compared to the previous year.
While cast product sales in the shaped parts sector increased inline with robust demand, sales of vehicles that use cast products• Food and lifestyledecreased significantly, resulting in overall lower sales compared tothe previous year.
In the Electronic Materials sector, while demand for anodized
aluminum foil for electrolytic capacitors showed signs of recovery,sluggish demand in the electrical machinery and electronics field
for products ranging from digital appliances to manufacturing
equipment resulted in significantly reduced shipments and sales
that were substantially lower compared to the previous year.
In the Panel System sector, reduced capital expenditure affected
a remarkable decrease in large projects involving clean rooms andindustrial refrigerators and freezers, which reduced sales andadversely affected profits by exerting upward pressure on the priceof raw materials in the first half.
In the Fabricated Products and Others segment, we began
shipments of aluminum containers for coffee beans. However, adecrease in demand for beer reflecting a preference for beer-like
alcoholic beverages caused a sharp drop in the shipment of
mainstay aluminum kegs for beer and commercial washingcontainers for beer servers, resulting in significantly lower sales
compared to the previous year.
In landscaping products, shipments of brazed honeycomb panels
declined slightly, while sales of mainstay aluminum railings wererobust, resulting in higher sales compared to the previous year.
Sales in the Fabricated Products and Others operations declined
10.1%, or ¥25,455 million, to ¥226,543 million. Operating profit
decreased 69.9%, or ¥9,236 million, to ¥3,976 million.
13

Review of Operations

Building Materials■ Consolidated Net Sales

Profile Shin Nikkei plays a central role in providing high-quality aluminum building
materials, operating in accordance with the basic concept of placing importance on thepreferences of residents and users. Products include everything from building construction
materials such as curtain walls, to window sashes, front doors, and other housing materials
as well as gates-fences, and other exterior products. Also, Shin Nikkei is developing products
adapted to wideranging user needs for energy conservation, environmental coexistence,
universal design, and security enhancement.
■ Net Sales■ Consolidated Operating Profit■ Applications■ Principal Products(Millions of Yen)

(Millions of Yen)

• Building• Building materials• Housing materials• Exterior products

200,000

8,000

150,000

4,000

100,000

0

50,000-4,0000’05 ’06 ’07 ’08 ’09-8,00014

Millions of Yen

25.3%’05 ’06 ’07 ’08 ’09■ Overview of results for fiscal 2008
While the effects of the 2007 revisions to the Building Standards
Law have waned, private capital investment and public investment
have shrunk, consumer spending has cooled as demand continued
to decline and competition intensified, adding to the severity of thebusiness environment.
Given these circumstances, NLM’s core Group Building Materials
company, Shin Nikkei, was compelled to conduct structural reforms
in line with changes in the market environment, including the
reduction of 400 full and part-time employees in the first half andchanges capital to strengthen the company’s financial structure
while engaging in thorough cost-cutting initiatives focused ongate & fence

140,060

fully opening sashes "Alupla Clus"

manufacturing and purchasing. Furthermore, in response toworsening economic conditions in the second half, we decided torealign and consolidate manufacturing sites, including additional
staff reductions, starting with the March 2009 transfer of the
Funabashi Complex’s materials manufacturing to the Hokuriku
Complex to strengthen our management base with a second
increase of capital.
Despite these efforts, Building Materials sales decreased
12.6%, or ¥20,224 million, to ¥140,060 million, and operating
results dropped ¥4,894 million, to a ¥7,870 million operating
loss, due to market contractions that were far more severe than
anticipated.

curtain wall
(GRANTOKYO NORTH TOWER)NLM GROUP

Nippon Light Metal Group consists of 115 subsidiaries and 44 affiliates,
The Group's major operations and the business relations between the Company, major consolidated subsidiaries andaffiliates accounted for by the equity method are shown in the diagram below.

Aluminum
Ingot andChemicals(Manufacture and Sales)(Sales and Others)● Aluminium Wire and Rod Co., Ltd.

● Nikkei Sangyo Co., Ltd.

● Nikkei MC Aluminium Co., Ltd.

● Tamai Steamship Co., Ltd.

● Nikkei MC Aluminum America Inc.
● Nikkei MC Aluminum (Thailand) Co., Ltd.
● Nikkei M.C. Aluminum (Kunshan) Co., Ltd.
● Ihara Nikkei Chemical Industry Co., Ltd.

Aluminum
Sheet andExtrusions(Manufacture and Sales)(Sales and Others)● Nikkei Extrusions Co., Ltd.

● Nikkei Sangyo Co., Ltd.

● Nikkeikin Aluminium Core Technology Co., Ltd.
● Nikkei Siam Aluminium Ltd.
● Nonfemet International (China-Canada-Japan)

Aluminium Co., Ltd.

Nippon Light Metal Company, Ltd.
(Manufacture and Sales)(Manufacture and Sales)(Sales and Others)● NLM ECAL Co., Ltd.

● Nikkei Information System Co., Ltd.

● Toyo Aluminium K.K.

● Nikkei Logistics Co., Ltd.

● Tokai Aluminum Foil Co., Ltd.

● Sumikei Nikkei Engineering Co., Ltd.

● Toyal America Inc.

● Toho Earthtech Inc.

● Toyal Europe S.A.S.U.

FabricatedProducts
and Others● Toyo Aluminium Ekco Products Co., Ltd.
● Nikkei Sangyo Co., Ltd.
● Nikkei Panel System Co., Ltd.
● Nippon Electrode Co., Ltd.
● Nippon Fruehauf Co., Ltd.
● Nikkei Matsuo Co., Ltd.
● Sam-A Aluminium Co., Ltd.
● Nikkei Heat Exchanger Co., Ltd.

Building
Materials(Manufacture and Sales)(Sales and Others)● Shin Nikkei Co., Ltd.

● Nikkei Sangyo Co., Ltd.

● Riken Light Metal Industrial Co., Ltd.
● Cosmo Industry Co., Ltd.

Customer● Consolidated subsidiaries: 108 companies● Affiliates accounted for by the equity method: 19 companies

Flow of products and raw materials
Flow of services(As of July 31, 2009)15

CONSOLIDATED SIX - YEAR SUMMARY
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries Years ended March 31

Gross Profit and
Gross Profit Margin2004%

150,000

Gross Profit
Gross Profit Margin20

90,00015

60,00010

30,000502004 2005 2006 2007 2008 2009

Millions of yen

0Years ended March 31

Interest-bearing Debt
300,000

250,000

200,000

150,000

100,000

50,00002004 2005 2006 2007 2008 2009

Millions of yen

Years ended March 31

Free Cash Flows
25,00020,00015,00010,0005,000

0-5,0002004 2005 2006 2007 2008 2009

Millions of yen(Millions of yen)25

120,000

Years ended March 31

2005

Financial Results
Net Sales..................................................................................................
Gross Profit.............................................................................................
Gross Profit Margin (%).........................................................................
Operating Profit (loss)...........................................................................
Ordinary Profit (loss).............................................................................
Net Income (loss)...................................................................................
Segment Information
Net Sales:
Aluminum Ingot and Chemicals......................................................
Aluminum Sheet and Extrusions.....................................................
Fabricated Products and Others.......................................................
Building Materials. ...........................................................................
Total. .................................................................................................
Operating Profit (Loss):
Aluminum Ingot and Chemicals......................................................
Aluminum Sheet and Extrusions.....................................................
Fabricated Products and Others.......................................................
Building Materials. ...........................................................................
Elimination or corporate items........................................................
Total. .................................................................................................
Financial Position
Current Assets.........................................................................................
Property, plant and equipment..............................................................
Intangible assets.....................................................................................
Investments and other assets.................................................................
Current liabilities ..................................................................................
Long-term liabilities...............................................................................
Shareholders’ equity (Note 3)................................................................
Valuation and translation adjustments (Note 3)..................................
Minority interests in consolidated Subsidiaries (Note 3). ....................
Interest-bearing Debt (Note 2). .............................................................
Cash Flows
Cash Flows from Operating Activities....................................................
Depreciation and Amortization........................................................
Cash Flows from Investing Activities. ....................................................
Capital Expenditures. .......................................................................
Cash Flows from Financing Activities....................................................
Per Share Data (yen and dollars)
Net Income (loss) - basic.......................................................................
- diluted.....................................................................
Net Assets (Note 3)..................................................................................
Cash Dividends. ......................................................................................
Indices
Return on Capital Employed (ROCE)(%)....................................................
Return on Equity (ROE)(%)..................................................................
Equity Ratio (%).....................................................................................
OthersNumber of Shares Outstanding (thousands)...................................................
R&D Expenditures..................................................................................
Number of Employees. ...........................................................................

¥532,201112,29321.1
26,35516,092
11,525¥560,284
117,741
21.0
30,56021,857
13,48882,85164,860215,461
169,029532,201

92,94872,824
219,802174,710560,284

4,727
3,667
14,071
6,687(2,797)
26,3558,866
5,785
14,883
4,068(3,042)30,560290,625
182,562
3,935
43,463291,799
122,593
99,6182,840
3,735
231,807285,252
179,614
3,895
46,020266,212129,237
112,068
3,214
4,050
210,368

23,44816,504(5,556)
17,516(27,703)

32,345
16,591(14,131)
16,973(22,702)¥ 21.24—
188.842.5¥ 24.78
23.83
212.63
3.5

7.0
12.0
19.7

8.6
12.4
22.4

543,350¥ 4,804
12,598543,350¥ 5,538
12,927Note 1: U
 .S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥98.23 =U.S.$1.00. See Note 2 of the Notes to the Consolidated Financial Statements.
Note 2: Interest-bearing Debt = Long-term debt and Short-term borrowings, excluding capital lease obligations +Notes discounted + Notes endorsed
Note 3: E ffective the year ended March 31, 2007, the Company adopted the new accounting standard“Accounting Standard for Presentation of Net Assets in the Balance Sheet”.

16

2006

2007

2008

2009

Return on Capital Employed(ROCE)

2009(Thousands of
U.S. dollars)(Note1)(Millions of yen)

9

6¥577,061
116,078
20.1
28,92322,3539,684¥618,158
120,345
19.5
30,51925,24812,755¥647,846
108,946
16.8
17,998
11,222(10,310)¥554,094
76,72013.8(11,892)(16,936)(31,442)$5,640,782
781,024
13.8(121,063)(172,412)(320,086)

97,07770,714
238,422
170,848
577,061

110,667
78,929255,514173,048
618,158

156,189
79,375251,998
160,284
647,846

120,725
66,766
226,543
140,060
554,094

1,229,003
679,691
2,306,251
1,425,837
5,640,782

9,640
6,435
15,848(163)(2,837)28,923

11,667
6,443
14,156
1,073(2,820)30,519

9,172
1,630
13,212(2,976)(3,040)17,998748(5,737)3,976(7,870)(3,009)(11,892)

7,615(58,404)
40,476(80,118)(30,632)(121,063)

294,331
185,005
5,261
48,929281,505
122,033
119,7196,275
3,994
208,817340,897
184,070
5,969
48,527
287,436
149,916130,176
7,770
4,165
223,607

311,083
179,243
6,189
43,958
270,545
140,931
118,294
3,465
7,238
223,660

257,386
176,231
5,005
39,949264,386
125,404
85,170(1,255)
4,866
231,686

2,620,238
1,794,065
50,952406,688
2,691,500
1,276,636
867,047(12,776)
49,5362,358,607

26,77917,315(19,724)
19,819(9,862)

21,397
17,481(19,514)
20,702
12,48325,018
20,160(25,051)
25,263(9,028)26,674
22,113(22,086)
24,997
6,422

271,546
225,115(224,840)
254,474
65,377¥ 17.79
16.89
232.544.0¥ 23.56
22.36
254.82
5.0¥ (19.00)—
223.613.0¥(57.77)—
154.22
—

8.6
8.0
23.6

9.3
9.7
23.8

4.5
(7.9)
22.5

(4.1)
(30.6)
17.5(4.1)(30.6)
17.5

543,350¥ 5,133
13,492

543,350¥ 5,504
13,493545,126¥ 5,858
14,084545,126
5,972
13,678545,126$ 60,796
13,678

3

0

-3

-6

2004 2005 2006 2007 2008 2009

Years ended March 31%

Return on Equity (ROE)
20

10

0

-10

-20

-30

-40

2004 2005 2006 2007 2008 2009

Years ended March 31%

R&D Expenditures
7,000

6,000

$

(0.59)
—
1.57
—

5,000

4,000

3,000

2,000

1,000

0

2004 2005 2006 2007 2008 2009

Millions of yen

Years ended March 31

17

FINANCIAL REVIEWOverview
In fiscal 2008, ended March 31, 2009, the Japanese economy
faced an extremely severe situation, embroiled in a global
economic recession spurred by financial instability in the
United States that sharply aggravated corporate earnings andthe employment environment.
The domestic aluminum industry experienced asignificant decline in demand for products from its principle
customers in the automotive, electrical and electronics
industries as a result of large-scale production cutbacks andinventory adjustments in these and related industries.
Sudden fluctuations in raw material prices, including a steep
rise in the price of aluminum in the first half, and thesubsequent sharp decline in raw material prices during thesecond half, exerted a large influence on corporate earnings.

Non-operating income grew 18.5%, to ¥4.5 billion(US$46 million), compared to the previous year, reflecting
improved equity in earnings of affiliates. Non-operating
expenses shrank 9.7%, to ¥9.6 billion (US$98 million), but
this was due to a decrease in losses on the disposal of
inventory included in other non-operating expenses. As aresult, NLM posted an ordinary loss of ¥16.9 billion (US$172
million) after recording an ordinary profit of ¥11.2 billion in
the previous year.
Special losses totaled ¥15.0 billion (US$153 million).
These included a ¥5.2 billion (US$53 million) loss on
impairment of fixed assets of the building materials
operations at Shin Nikkei’s Funabashi Complex, ¥5.0 billion(US$51 million) in an additional retirement allowance forearly retirement program and a ¥2.5 billion (US$25 million)
restructuring loss related to Shin Nikkei’s Funabashi
Complex. In addition, we booked ¥1.9 billion ($19 million) in
expected cost of corrective measures for product defects
related to resin sashes.
As a result, the loss before income taxes and minority
interests during the period under review was ¥32.0 billion(US$326 million). Consequently, corporate, inhabitant andbusiness taxes for fiscal 2008 declined ¥5.1 billion, to ¥1.1
billion (US$11 million), with the amount of deferred income
taxes totaling ¥0.5 billion ($5 million).
Consequently, the net loss in fiscal 2008 was ¥31.4 billion(US$320 million), an increase from ¥10.3 billion in fiscal
2007. The average number of shares outstanding during theyear increased to 544,306,075, compared with 542,732,677 in

Earnings and Expenses
As a result of these drastic changes, the NLM Group
consolidated net sales decreased 14.5% year on year, to ¥554.1
billion (US$5,641 million). For sales by segment, please see
the Review of Operations, page 11 to 14.
Compared to the previous year, the cost of goods solddecreased 11.4%, to ¥477.4 billion (US$4,860 million), thecost to sales ratio declined 3 percentage points, to 86.2%, andselling, general and administrative expenses dropped 2.6%, to¥88.6 billion (US$902 million). As a result, operating resultstransitioned from an operating profit of ¥18.0 billion in theprevious year to an operating loss of ¥11.9 billion (US$121
million) in the year under review.
Net Sales By Segment
700

Total Net Assets

Equity Ratio

150

25

120

20

90

15

60

10

30

5

600
500
400
300
200
100
0

2005

Billions of yen

2006

2007

2008

Years ended March 31

Aluminum Ingot and Chemicals
Aluminum Sheet and Extrusions
Fabricated Products and Others
Building Materials

18

2009

0

2005

Billions of yen

2006

2007

2008

0

2009

As of March 31

%

2005

2006

2007

2008

2009

As of March 31

fiscal 2007, with the net loss per share increasing to ¥57.77(US$0.59) compared to ¥19.00 in fiscal 2007. While the cash
dividend per share in fiscal 2007 was ¥3.0, in accordance witha resolution at the General Meeting of Shareholders on June
26, 2009, there was no full-year cash dividend distributed infiscal 2008.
Assets, Liabilities and Shareholders’ Equity
Total assets decreased 11.5%, to ¥478.6 billion (US$4,872
million), during the period under review as a result of adecrease in the balance of notes and accounts receivabletrade due to lower sales although there was an increase in
cash and deposits stemming from increased borrowings.
Total liabilities decreased 5.3%, to ¥389.8 billion(US$3,968 million), compared to the previous year as a resultof a decline in notes and accounts payable-trade due to adecrease in purchases despite an increase in borrowings.
In fiscal 2008, interest-bearing debt was ¥231.7 billion,¥8.0 billion higher than in fiscal 2007 as a result of anincrease in cash on hand.
During the period under review, net assets declined 31.2%
to ¥88.8 billion (US$904 million) due to a decrease inretained earnings resulting from the recorded net loss as well
as a decrease in valuation and translation adjustments.
Net assets per share decreased 31.0%, to ¥154.22(US$1.57). The equity ratio dropped 5.0 percentage points, to17.5%.
Cash Flows
Cash and cash equivalents as of March 31, 2009, were up
33.3%, or ¥11.0 billion, to ¥44.0 billion (US$448 million)
from one year earlier.
Net cash provided by operating activities was up 6.6%, or¥1.7 billion, to ¥26.7 billion (US$272 million), primarily as aresult of lower working capital requirements and reduced
corporate taxes paid.
Net cash used in investing activities decreased 11.8%, or¥3.0 billion, to ¥22.1 billion (US$225 million), primarily due
to a decrease in payments for the purchase of fixed assets.
Net cash provided by financing activities was ¥6.4 billion(US$65 million), compared with ¥9.0 billion used in theprevious year, reflecting a ¥14.7 billion net increase in shortand long-term borrowings.

Outlook for Fiscal 2009
The economic prospects for fiscal 2009 remain uncertain due
to the continued global recession. We anticipate continued
severity in the business environment surrounding ourcustomers in the automotive, electrical and electronics,
construction and related industries. In terms of our own
business, while we foresee falling raw materials prices as afactor in improving profit and loss, we also expect
manufacturing volumes to remain low.
In recognition of this outlook, we will review ourmanagement and personnel structures, undertake initiatives
to further reduce costs and eliminate expenses and enhance
productivity, while constructing a more efficient Groupmanagement structure, promoting improvements to ourearnings base and devoting our full effort to maintaining
profitability in an attempt to respond more quickly tochanges in the business environment. Furthermore, aiming
for sustainable growth, we will strengthen our business
infrastructure to position ourselves for the eventual economic
recovery while enhancing our customer-oriented sales force
and developing new products and business. At the same time,
we will concentrate the efforts of the entire Group to cultivate
business in growth fields and accelerate overseas businessdevelopments utilizing materials expertise and technologicalcapabilities developed over many years in an attempt tosecure stable earnings.
Our outlook for fiscal 2009 calls for net sales of ¥470.0
billion, primarily reflecting lower production volumes. On the
profit front, the outlook calls for operating profits of ¥9.0
billion, ordinary profits of ¥2.0 billion and net income of ¥0.5
billion in anticipation of improved inventory valuation losses,
labor cost reductions and increases in the sale of new
products.
We forecast net income per share of ¥0.92. However, as in
the period under review, we expect to be unable to pay a cash
dividend in fiscal 2009.

19

Consolidated Balance Sheets
Nippon Light Metal Company, Ltd. and consolidated subsidiaries

2008

March 31,2009

(Millions of yen)

2009
(Thousands of
U.S. dollars)(Note 2)

AssetsCurrent assets:
Cash and deposits (Notes 3 and 5) Notes and accounts receivable – trade 
Finished products Work-in-progress, including costs related to construction-type contracts
Raw material and supplies Deferred tax assets (Note 7) 
Other current assets Allowance for doubtful accounts 
Total current assets ¥ 31,287 ¥ 44,223
174,848
124,230
31,09826,73233,32928,94722,49819,395
5,381
6,629
14,953
9,838(2,311)(2,608)311,083
257,386$ 450,198
1,264,685
272,137
294,686
197,445
67,484
100,153(26,550)
2,620,238

Property, plant and equipment (Note 5):
Land 
Buildings and structures 
Machinery and equipment 
Construction-in-progress 
Accumulated depreciation 
Total property, plant and equipment 63,603147,096
286,480
5,056(322,992)
179,243

63,076146,260
295,524
5,736(334,365)
176,231642,126
1,488,954
3,008,490
58,394(3,403,899)
1,794,065

Intangible assets:
Goodwill 
Other intangible assets 
Total intangible assets 

1,984
4,205
6,189

1,376
3,629
5,005

14,00836,94450,952

Investments and other assets:
Investment securities (Notes 4 and 5) Deferred tax assets (Note 7) 
Other assets Allowance for doubtful accounts 
Total investments and other assets 

29,593
6,356
9,662(1,653)
43,95825,317
6,548
10,590(2,506)39,949257,732
66,660107,808(25,512)406,688¥540,473¥478,571$4,871,943

Total assets 

20

2008

March 31,2009

(Millions of yen)

Liabilities and net assets
Current liabilities:
Short-term borrowings (Note 5) Current portion of long-term debt (Note 5) Notes and accounts payable – trade 
Income taxes payable 
Other current liabilities 
Total current liabilities Long-term liabilities:
Long-term debt (Note 5) Accrued pension and severance costs (Note 6) 
Deferred tax liabilities on land revaluation surplus (Notes 7 and 9) 
Other long-term liabilities (Notes 5 and 7) 
Total long-term liabilities 
Total liabilities 
Net assets :Shareholders’ equity:
Common stock:
Authorized: 1,600,000,000 shares
Issued: 545,126,049 shares 
Additional paid-in capital Retained earnings Treasury stock, at cost(621,759 shares in 2008 and 984,847 shares in 2009) 
Total shareholders’ equity 
Valuation and translation adjustments:
Net unrealized gains on securities (Note 4) Net unrealized gains (losses) on hedges (Note 1(m)) 
Revaluation surplus (Note 9) 
Foreign currency translation adjustments 
Total valuation and translation adjustments 
Minority interests in consolidated subsidiaries 
Total net assets Contingent liabilities (Note 13)
Total liabilities and net assets 

2009(Thousands of
U.S. dollars)(Note 2)

¥ 93,070
26,450108,1122,435
40,478
270,545¥108,851
34,09078,063854
42,528264,386$1,108,124
347,043794,696
8,694
432,943
2,691,500

104,555
28,145522
7,709
140,931411,476

91,07027,163522
6,649
125,404
389,790927,110276,524
5,314
67,6881,276,636
3,968,136

39,08525,42053,911

39,08525,42020,835397,893258,781
212,104

(122)

(170)

(1,731)

118,294

85,170867,047

2,219
308
145
793
3,465
7,238
128,997

374
(991)
145
(783)
(1,255)
4,866
88,781

3,807(10,088)
1,476(7,971)(12,776)
49,536
903,807¥540,473¥478,571$4,871,943

The accompanying notes are an integral part of these financial statements.

21

Consolidated Statements of Operations
Nippon Light Metal Company, Ltd. and consolidated subsidiaries

Year ended March 31,
2009

2008

(Millions of yen)

Net sales 
Cost of sales (Note 12) 
Gross profit 
Selling, general and administrative expenses (Note 12) 
Operating profit (loss) Non-operating income:Interest income Equity in earnings of affiliates 
Rental income Royalty income Other Total non-operating income Non-operating expenses:
Interest expense Amortization of transition obligation for employees’ retirement benefits (Note 6) 
Other Total non-operating expenses 
Ordinary profit (loss) Special gains:
Gain on changes in equity interest in affiliates Reversal of allowance for doubtful accounts Gain on insurance settlement 
Total special gains Special losses:
Loss on impairment of fixed assets (Note 14) Additional retirement allowance for early retirement program 
Restructuring loss 
Cost of corrective measures for product defects 
Loss on disposal of fixed assets 
Total special losses 
Loss before income taxes and minority interests 
Income taxes (Note 7):
Current Deferred 
Minority interests in net income (loss) of consolidated subsidiaries 
Net loss Per share of common stock (Note 15):
Net loss:
Basic Diluted 
Cash dividends 
The accompanying notes are an integral part of these financial statements.

22

2009
(Thousands of
U.S. dollars)(Note 2)

¥647,846
538,900
108,946
90,94817,998¥554,094
477,374
76,72088,612(11,892)$5,640,782
4,859,758
781,024
902,087(121,063)

138
350
663
414
2,263
3,828

147
1,001
766
407
2,215
4,536

1,497
10,1907,798
4,143
22,54946,177

3,931
2,070
4,603
10,604
11,222

3,750
2,025
3,805
9,580
(16,936)

38,176
20,61538,73597,526(172,412)

1,101
1,056
318
2,475

—
—
—
—

—
—
—
—

11,839
2,300
—
1,679
—
15,818(2,121)

5,245
5,047
2,461
1,859
437
15,049(31,985)

53,39551,37925,05418,925
4,449
153,202(325,614)

6,233
1,110
1,383
457
7,616
1,567
573
(2,110)¥ (10,310) ¥(31,442)

11,300
4,652
15,952(21,480)$ (320,086)(Yen)¥ (19.00) ¥ (57.77)
—
—
3.00
—

(U.S. dollars)(Note 2)

$

(0.59)——

Consolidated Statements of Changes in Net Assets
Nippon Light Metal Company, Ltd. and consolidated subsidiaries

Shareholders’ equity
Commonstock

Balance at March 31, 2007 Share exchange 
Net loss 
Cash dividends (Note 8) Net increase in treasury stock 
Net unrealized losses on
securities (Note 4) Net unrealized losses on hedges 
Foreign currency translation
adjustments 
Net increase in minority interests
in consolidated subsidiaries 
Balance at March 31, 2008 
Net loss 
Cash dividends (Note 8) Net increase in treasury stock 
Net unrealized losses on
securities (Note 4) Net unrealized losses on hedges 
Foreign currency translation
adjustments Net decrease in minority interests
in consolidated subsidiaries 
Balance at March 31, 2009 ¥39,085

Additional
paid-in
capital¥24,569851

Retainedearnings¥66,928(10,310)(2,707)¥(406)
407¥5,449

¥619

¥145

¥1,557(123)(3,230)¥4,165 ¥142,111
1,258(10,310)(2,707)(123)(3,230)
(311)

(311)
(764)

39,08525,42053,911(31,442)(1,634)

(122)

2,219

¥39,085¥25,420¥20,835

Commonstock

Additional
paid-in
capital$397,893$258,780

Retainedearnings$548,824(320,086)(16,634)

308

145

793

(48)
(1,845)

Shareholders’ equity

Balance at March 31, 2008 
Net loss 
Cash dividends (Note 8) Net increase in treasury stock 
Net unrealized losses on
securities (Note 4) Net unrealized losses on hedges 
Foreign currency translation
adjustments 
Net increase in minority interests
in consolidated subsidiaries 
Balance at March 31, 2009 

Treasurystock,
at costValuation and translation adjustments
Minority
Net
Net
Foreignunrealized unrealized Revaluation currency interests ingains on gains (losses) surplus
translation consolidated Total net
assetssecurities on hedges(Note 9) adjustments subsidiaries(Millions of yen)¥(170)¥ 374

3,073
128,997(31,442)(1,634)(48)¥145(1,576)(1,576)¥ (783)(2,372) (2,372)¥4,866 ¥ 88,781

Valuation and translation adjustments
Minority
Net
Net
Foreign
Treasury
unrealized unrealized Revaluation currency interests in
Total
stock,
gains on gains (losses) surplus
translation consolidated
at costsecurities on hedges(Note 9) adjustments subsidiaries net assets(Thousands of U.S. dollars) (Note 2)$(1,242)$22,590$ 3,135$1,476$ 8,073(489)(13,224)(16,044)$(1,731)$ 3,807$(10,089)$73,684 $1,313,213(320,086)(16,634)(489)(18,783)(13,224)(18,783)$397,893 $258,780 $212,104

3,073
7,238

(1,845)(1,299)(1,299)¥(991)(764)$1,476(16,044)(24,147) (24,147)$(7,971) $49,537 $903,806

The accompanying notes are an integral part of these financial statements.

23

Consolidated Statements of Cash Flows
Nippon Light Metal Company, Ltd. and consolidated subsidiaries

2008

Year ended March 31,
2009(Millions of yen)

Cash flows from operating activities
Loss before income taxes and minority interests 
Depreciation and amortization 
Loss on impairment of fixed assets Additional retirement allowance for early retirement program 
Restructuring loss 
Cost of corrective measures for product defects 
Loss on disposal of fixed assets Gain on changes in equity interest in affiliates Gain on insurance settlement (Decrease) increase in allowance for doubtful accounts Increase (decrease) in accrued pension and severance costs Interest and dividend income Interest expense 
Equity in earnings of affiliates 
Decrease in notes and accounts receivable – trade 
Decrease in inventories 
Decrease in notes and accounts payable – trade 
Other Subtotal Interest and dividend income received Interest paid 
Payments for additional retirement payments 
Payments for corrective measures for product defects Insurance proceeds received for disasters Income taxes paid 
Net cash provided by operating activities 
Cash flows from investing activities
Net decrease in time deposits 
Payments for purchases of fixed assets Proceeds from sales of fixed assets 
Payments for purchases of investment securities Proceeds from sales of investment securities Proceeds from sales of stocks of subsidiaries and affiliates Net decrease (increase) in long-term loans receivable 
Cash received from acquisitions 
Other Net cash used in investing activities 
Cash flows from financing activities
Net increase in short-term borrowings Proceeds from long-term debt 
Repayment of long-term debt 
Cash dividends paid 
Cash dividends paid to minority interests 
Other Net cash (used in) provided by financing activities 
Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year 
Increase in cash and cash equivalents resulting from merger withunconsolidated subsidiaries 
Cash and cash equivalents of newly consolidated subsidiaries 
Cash and cash equivalents at end of year (Note 3) 
The accompanying notes are an integral part of these financial statements.

24

2009
(Thousands of
U.S. dollars)(Note 2)¥(2,121)
20,16011,839
2,300
—
1,679
—
(1,101)(318)(1,083)
309
(857)
3,931
(350)
22,272
3,253(17,641)(2,013)40,2591,075(3,951)—(489)
905(12,781)
25,018¥(31,985)
22,113
5,245
5,047
2,461
1,859
437
—
—
1,131
(934)
(552)
3,750
(1,001)47,22911,239(28,345)(1,858)35,836685(3,734)(2,469)(675)—(2,969)26,674$(325,613)
225,115
53,39551,37925,05318,925
4,449——
11,514(9,508)(5,619)38,176(10,190)
480,800
114,415(288,558)(18,916)
364,817
6,974(38,013)(25,135)(6,872)—(30,225)
271,54614(24,370)
401
(43)
261
—
11
308
(1,633)(25,051)47(22,567)
490
(48)
65
849
(401)
—
(521)
(22,086)478(229,736)
4,988
(489)
662
8,643
(4,082)–(5,304)(224,840)

4,821
18,918(29,756)(2,685)(214)(112)(9,028)(94)(9,155)42,125

16,122
19,104(26,497)(1,611)
(283)
(413)
6,422
(34)
10,97633,006

164,125
194,482(269,745)(16,400)(2,881)(4,204)65,377(345)
111,738
336,007—36¥33,00621—¥ 44,003

214—$ 447,959

Notes to Consolidated Financial Statements
Nippon Light Metal Company, Ltd. and consolidated subsidiaries

1. Significant Accounting Policies(a) Basis of presentation
The accompanying consolidated financial statements of Nippon Light Metal Company, Ltd. (the “Company”) and its consolidated subsidiaries areprepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by
the Company as required by the Financial Instruments and Exchange Law of Japan. The notes to the consolidated financial statements include
certain financial information which is not required under accounting principles generally accepted in Japan, but is presented herein as additional
information. The accompanying consolidated financial statements include certain reclassifications for the purpose of presenting them in a form
familiar to readers outside Japan.
(b) Principles of consolidation and accounting for investments in affiliates
The accompanying consolidated financial statements include the accounts of the Company and, with minor exceptions, companies substantiallycontrolled by the Company. All significant intercompany transactions and accounts have been eliminated in consolidation.
Investments in equity securities issued by unconsolidated subsidiaries and affiliates are accounted for by the equity method, except thatinvestments in certain unconsolidated subsidiaries and affiliates are stated at cost because the effect of application of the equity method would be
immaterial.
The difference between the cost and the underlying net assets of investments in consolidated subsidiaries or affiliates accounted for by theequity method has been allocated to identifiable assets based on fair value at the respective dates of acquisition. Any unassigned residual amount isrecognized as goodwill and amortized by the straight-line method over an estimated useful life, with the exception of minor amounts which arecharged to income in the year of acquisition.
(c) Translation of foreign currencies
All monetary assets and liabilities denominated in foreign currencies, whether long-term or short-term, are translated into Japanese yen at theexchange rates prevailing at the balance sheet date. The resulting gains and losses are included in net loss for the year.
Assets and liabilities of foreign subsidiaries and affiliates are translated into Japanese yen at the exchange rates prevailing at the balance sheet
date. Income statement accounts for the year are translated into Japanese yen using the average exchange rates during the year. The resulting
translation adjustments are accounted for as foreign currency translation adjustments, except for the minority interest portion which is allocatedto minority interests in consolidated subsidiaries.
(d) Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows comprise of cash in hand, bank deposits available for withdrawal on
demand and short-term investments with an original maturity of three months or less and which are exposed to a minor risk of fluctuation invalue.
(e) Inventories
Inventories are principally stated at cost, determined by the moving average method, except that the specific identification method is applied tocosts related to construction-type contracts. In addition, the amount of Balance Sheet is calculated by write-down method based on descent of
profitability.
On July 5, 2006, the Accounting Standards Board of Japan (“ASBJ”) issued ASBJ Statement No. 9, “Accounting Standard for Measurement of
Inventories.” Effective April 1, 2008, the Company adopted this accounting standard. The net book value of inventories held for sale in the ordinary
course of business is written down when their net realizable values decline. The effect of this change for the year ended March 31, 2009, was toincrease operating loss, ordinary loss, and loss before income taxes and minority interests by ¥7,596 million ($77,329 thousand), and increase net
loss by ¥4,873 million ($49,608 thousand) as compared to the amounts which would have been recorded under the previous method. In addition,in accordance with the change, devaluation on inventories, which was previously recorded as non-operating expenses, has been changed to berecorded as cost of sales. The effect of this change for the year ended March 31, 2009, was to increase operating loss by ¥2,159 million ($21,979
thousand).
(f) Investment securities
Securities other than equity securities issued by subsidiaries and affiliates are classified into held-to-maturity securities or available-for-salesecurities.
Held-to-maturity securities are stated at amortized cost. Available-for-sale securities for which market quotations are available are stated at fairvalue with net unrealized gains or losses being included in net assets, net of the related taxes. Available-for-sale securities for which market
quotations are not available are stated at cost. Realized gains and losses on sales are determined using the average cost method and are included
in net income for the year.
In cases where the fair value of held-to-maturity securities or available-for-sale securities has declined significantly and such impairment isother than temporary, such securities are written down to fair value and the resulting losses are charged to income for the year.
(g) Allowance for doubtful accounts
Allowance for doubtful accounts is estimated by applying the average percentage of actual bad debts in the past to the balance of receivables. In
addition, an amount deemed necessary to cover non-collectible receivables is provided on an individual account basis.
25

Notes to the Consolidated Financial Statements(h) Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost. Depreciation is computed principally using the straight-line method at rates based on theestimated useful lives of the respective assets, ranging from 2 years to 60 years for buildings and structures, and from 2 years to 22 years formachinery and equipment.
Effective April 1, 2007, the Company and its domestic consolidated subsidiaries have changed their method of accounting for depreciation ofproperty, plant and equipment purchased on or after April 1, 2007 in accordance with the revision made to the Corporate Tax Law which went into
effect on April 1, 2007. The effect of this change for the year ended March 31, 2008 was to decrease operating profit and ordinary profit by ¥332
million, increase loss before income taxes and minority interests by ¥332 million, and increase net loss by ¥213 million as compared to theamounts which would have been recorded under the previous method.
In addition, effective April 1, 2007 the Company and its domestic consolidated subsidiaries have changed their method of accounting fordepreciation of property, plant and equipment purchased on or before March 31, 2007. Such assets which have been depreciated to 5% of theirrespective acquisition cost under the Corporate Tax Law prior to the revision are further depreciated to their respective memorandum value fromthe following fiscal year using the straight-line method over a period of 5 years, and such depreciate is included in depreciation cost. The effect of
this change for the year ended March 31, 2008 was to decrease operating profit by ¥1,566 million, decrease ordinary profit by ¥1,534 million,
increase loss before income taxes and minority interests by ¥1,534 million, and increase net loss by ¥1,042 million as compared to the amounts
which would have been recorded under the previous method.
Effective April 1, 2008, the Company and its domestic consolidated subsidiaries have changed their useful life of machinery and equipment
stimulated by the revision made to the Corporate Tax Law which went into effect on April 1, 2008. The effect of this change for the year ended
March 31, 2009 was to increase operating loss, ordinary loss, and loss before income taxes and minority interests by ¥2,127 million ($21,653
thousand), and increase net loss by ¥1,439 million ($14,649 thousand) as compared to the amounts which would have been recorded under theprevious method.
(i) Intangible assets
Intangible assets are amortized by the straight-line method over their respective estimated useful lives. Expenditure relating to computer softwaredeveloped for internal use is charged to income as incurred, except in cases where it contributes to the generation of income or future cost savings.
In these cases, it is capitalized and amortized using the straight-line method over its estimated useful life, which is no longer than 5 years.
(j) Accrued pension and severance costs
Accrued pension and severance costs for employees represent the projected benefit obligation in excess of the fair value of the plan assets, except forunrecognized transition obligation and unrecognized actuarial gain or loss. Unrecognized transition obligation is amortized by the straight-line
method over a period of 12 years and unrecognized actuarial gain or loss is amortized by the declining-balance method over a period of 12 years
from the year following that in which it arises, except for unrecognized costs with respect to employees who retired under the early retirement
program which were fully amortized at the time of the employees’ retirement.
(k) Lease transactions
Effective April 1, 2008, the Company adopted the accounting standard, ASBJ Statement No.13 “Accounting Standard for Lease Transactions” andASBJ Guidance No.16 “Guidance on Accounting Standard for Lease Transactions.” released on March 30, 2007. Under this accounting standard,finance leases without options to transfer ownership of the leased assets to the lessee are accounted for as ordinary sale and purchase transactions.
These leased assets are depreciated to their respective salvage value of zero using the straight-line method over a period of leasing term. Financeleases without options to transfer ownership of the leased assets to the lessee before April 1, 2008 are permitted to be accounted for as operatingleases. In addition, finance leases with options to transfer ownership of the leased assets to the lessee are depreciated by the same method applied to
the fixed assets owned by the Company. The effect of this change for the year ended March 31, 2009 was insignificant.
(l) Income taxes
The income taxes of the Company and its domestic consolidated subsidiaries consist of corporate income taxes, local inhabitants’ taxes andenterprise taxes. The Company and its wholly-owned domestic subsidiaries use the Japanese consolidated taxation system.
The Company and its consolidated subsidiaries apply the deferred tax accounting method. Deferred tax assets and liabilities are determinedusing the asset and liability approach, and recognized for temporary differences between the tax bases of assets and liabilities and those as reported
in the consolidated financial statements.
(m) Derivatives
All derivatives are stated at fair value with changes in fair value being included in net income for the year in which they arise, except for derivatives
designated as hedging instruments.
The Company and its consolidated subsidiaries use derivatives to reduce their exposure to fluctuation in foreign exchange rates, interest rates,
and the prices of aluminum ingot in the market. Derivatives designated as hedging instruments are principally forward foreign exchange
contracts, interest rate swap contracts and aluminum ingot forward contracts. The underlying hedged items are trade accounts receivable andpayable, long-term bank loans and sales or purchases of aluminum ingot.
Gains and losses arising from changes in fair value of derivatives designated as hedging instruments are deferred and included in net incomein the same period in which the corresponding gains and losses on the underlying hedged items or transactions are recognized. The Company andits consolidated subsidiaries use interest rate swaps to hedge their interest rate risk exposure. The related interest differentials paid or received under
the interest rate swap agreements are recognized in interest expense over the term of the agreements.
The Company and its consolidated subsidiaries evaluate the effectiveness of their hedging activities by reference to the accumulated gains orlosses on the hedging instruments and the underlying hedged items from the commencement of the hedges.
26

Notes to the Consolidated Financial Statements(n) Research and development costs
Research and development costs are charged to income as incurred.
(o) Appropriation of retained earnings
Appropriation of retained earnings is reflected in the consolidated financial statements for the year in which the appropriation is approved at an
ordinary general meeting of shareholders.
The Company’s retained earnings consist of unappropriated retained earnings and a legal reserve as required by the Corporation Law of Japan.
The Corporation Law provides that an amount equal to 10% of distributions from unappropriated retained earnings paid by the Company and its
Japanese subsidiaries be appropriated to the legal reserve. Such appropriations are no longer required when the total amount of additional paid-in
capital and the legal reserve equals 25% of their respective stated capital.
Under the Corporation Law, the Company is permitted to transfer to unappropriated retained earnings the portion of its statutory reserve(additional paid-in capital and the legal reserve) in excess of 25% of common stock upon approval at a shareholders’ meeting. Any suchtransferred portion is available for dividend distribution.
(p) Net loss per share
Basic net loss per share of common stock, presented in the accompanying consolidated statements of operations, is computed based on theweighted average number of shares outstanding during each year.
(q) Reclassifications
Certain reclassifications of previously reported amounts have been made to conform them to the current year’s classifications.
(r) Unification of Accounting Policies
On May 17, 2006, the ASBJ issued ASBJ Practical Issues Task Force No. 18, “Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Financial Statements.” The Company adopted this accounting standard and made modification on
consolidation accounting. The effect of this change for the year ended March 31, 2009 was insignificant.
2. U.S. Dollar Amounts
The rate of ¥98.23 = U.S.$1, the approximate exchange rate prevailing on March 31, 2009, has been used for the purpose of presenting the U.S.
dollar amounts in the accompanying consolidated financial statements. These amounts are included solely for the convenience of the reader.
Accordingly, they should not be construed as representations that yen amounts actually represent, or have been or could be readily converted,
realized or settled in U.S. dollars at that rate.
3. Cash and Cash Equivalents
A reconciliation of cash and cash equivalents in the accompanying consolidated statements of cash flows to cash and deposits disclosed in theaccompanying consolidated balance sheets at March 31, 2008 and 2009 is summarized as follows:
2009

2008
(Millions of yen)

Cash and deposits Time deposits with maturities in excess of 3 months 
Certificates of deposit included in “Other current assets” Cash and cash equivalents ¥31,287(281)
2,000¥33,006

2009(Thousands of
U.S. dollars)¥44,223(220)—¥44,003$450,199(2,240)—$447,959

4. Investment Securities(a) Available-for-sale securities with available market quotations
The aggregate cost, carrying amount and gross unrealized gains and losses of available-for-sale securities comprising equity securities withavailable market quotations at March 31, 2008 and 2009 were as follows:
2009

2008
(Millions of yen)

Cost 
Unrealized gains 
Unrealized losses 
Carrying amount ¥3,954
3,868(218)¥7,604

2009(Thousands of
U.S. dollars)¥3,754
1,277(436)¥4,595$38,216
13,000(4,439)$46,77727

Notes to the Consolidated Financial Statements(b) Sales of available-for-sale securities
The realized gains on sales of available-for-sale securities for the years ended March 31, 2008 and 2009 were as follows:
2009

2008

2009

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

¥65
34
6

¥261
160
—

Sales proceeds 
Realized gains on sales 
Realized losses on sales 

$662
346
61

(c) Held-to-maturity securities and available-for-sale securities without available market quotations
The carrying amounts of held-to-maturity securities and available-for-sale securities without available market quotations at March 31, 2008 and2009 were as follows:
2009

2008

2009

(Millions of yen)Held-to-maturity securities:
Privately offered domestic debt securities 
Available-for-sale securities:
Equity investments in non-public companies 
Other ¥(Thousands of
U.S. dollars)

¥

86

73

11,05821¥11,152

11,153
2,084¥13,323$

743

112,573
214$113,530(d) Maturities of debt securities
Maturities of debt securities at March 31, 2008 and 2009 were as follows:2008
Due within
one year

Due after one year but
within five years

Due after five years but
within ten years

Due after
ten years(Millions of yen)

Debt securities:
Government and municipal bonds 
Corporate debt securities 
Other 

¥14
—
15
¥29

¥47
10
10
¥67

¥9
—
—
¥9

¥6
—
—
¥6

2009
Due within
one year

Due after one year but
within five years

Due after five years but
within ten years

Due after
ten years(Millions of yen)

Debt securities:
Government and municipal bonds 
Corporate debt securities 
Other 

¥15
—
10
¥25

¥34
10
—
¥44

¥9
—
—
¥9

¥5
—
—
¥5

2009
Due within
one year

Due after one year but
within five years

Due after five years but
within ten years

Due after
ten years(Thousands of U.S. dollars)

Debt securities:
Government and municipal bonds 
Corporate debt securities 
Other 

28

$153
—
102
$255

$347
101
—
$448

$92
—
—
$92

$51
—
—
$51

Notes to the Consolidated Financial Statements

5. Short-Term Borrowings and Long-Term Debt
Short-term borrowings at March 31, 2009 bore interest at annual rates ranging from 0.09% to 5.84% and mainly consisted of bank loans andshort-term notes maturing at various dates within one year.
Long-term debt at March 31, 2008 and 2009 comprised the following:
2009

2008

2009

(Millions of yen)

Loans, principally from banks and insurance companies due from 2008 to 2017with interest rates ranging from 0.75% to 7.74%:
Secured 
Unsecured Loans, principally from banks and insurance companies due from 2009 to 2018with interest rates ranging from 0.90% to 7.00%:
Secured 
Unsecured 
Unsecured 4.00% bonds due June 1, 2017, redeemable before due date 
Zero coupon convertible bonds due September 30, 2009 (*1) 
Zero coupon convertible bonds due September 30, 2016 (*2) Capital lease obligations due from 2008 to 2029 with interest rates ranging from
6.52% to 7.41% Capital lease obligations due from 2009 to 2029 with interest rates ranging from
3.40% to 7.20% Less:  portion due within one year 
Total long-term debt ¥ 24,727
74,695(Thousands of
U.S. dollars)

¥

—
—

$

—
—

—
—
601
9,964
20,083

16,32775,510589
9,955
20,073

166,212768,706
5,996
101,344
204,347

935

—

—

—
131,005(26,450)¥104,555

2,706
125,160(24,135)¥101,025

27,5481,274,153(245,699)$1,028,454(*1) The details of the zero coupon convertible bonds due September 30, 2009 are summarized as follows:
Stock type to be issued: Issue price per stock acquisition right: Initial exercise price: 
Total issue price: Exercisable period of stock acquisition rights: 

Common stockNone¥350 per share¥10,050 million
From August 9, 2004 to September 16, 2009(*2) The details of the zero coupon convertible bonds due September 30, 2016 are summarized as follows:
Stock type to be issued: Issue price per stock acquisition right: Initial exercise price: 
Total issue price: Exercisable period of stock acquisition rights: 

Common stockNone¥406 per share¥20,100 million
From August 4, 2006 to September 16, 2016

A summary of assets pledged as collateral for short-term borrowings and long-term debt at March 31, 2009 is as follows:
Cash and deposits Property, plant and equipment 
Investment securities (Millions of yen)(Thousands of
U.S. dollars)¥
6
66,330327$
61675,252
3,329(Millions of yen)(Thousands of
U.S. dollars)¥ 34,085
20,013
14,624
15,963
9,733
30,664¥125,082$ 346,992
203,736
148,875
162,506
99,084
312,165$1,273,358

The aggregate annual maturities of long-term debt outstanding at March 31, 2009 are summarized as follows:
Years ending March 31,

2010 
2011 
2012 
2013 
2014 
Thereafter 

29

Notes to the Consolidated Financial Statements

6. Retirement Benefit Plans
The Company and its domestic consolidated subsidiaries have defined benefit tax-qualified pension plans and a non-contributory plan covering
substantially all employees in Japan. Additional benefits may be granted to employees according to the conditions under which termination of
employment occurs. Certain foreign subsidiaries have defined contribution pension plans.
Accrued pension and severance costs at March 31, 2008 and 2009 are summarized as follows:
2009

2008

2009

(Millions of yen)

Projected benefit obligation 
Fair value of plan assets 
Unrecognized transition obligation 
Unrecognized actuarial loss 
Accrued pension and severance cost (Thousands of
U.S. dollars)¥(57,684)
19,376(38,308)
5,657
5,488
¥(27,163)¥(63,884)
24,074(39,810)
8,100
3,565
¥(28,145)$(587,234)
197,251(389,983)
57,59055,869$(276,524)

The net pension and severance costs related to retirement benefits for the years ended March 31, 2008 and 2009 are summarized as follows:
2009

2008

2009

(Millions of yen)

Service cost Interest cost Expected return on plan assets 
Amortization of transition obligation *1 
Amortization of unrecognized actuarial gain *2 
Net pension and severance costs (Thousands of
U.S. dollars)¥3,453
1,289
(575)
2,443
918
¥7,528¥3,903
1,339
(585)
2,070
(7)
¥6,720$35,152
13,122(5,854)24,8709,346$76,636*1 The above figures include ¥418 million ($4,255 thousand) for the year ended March 31, 2009, in respect of employees who retired during the year
ended March 31, 2009 under the early retirement program. This amount was fully amortized at the time of employees’ retirement.
*2 The above figures include an amount of ¥317 million ($3,227 thousand) for the years ended March 31, 2009 in respect of employees who retired
during the year ended March 31, 2009 under the early retirement program. This amount was fully amortized at the time of employees’ retirement.
*3 In addition to *1 and *2 above, additional benefits of ¥4,312 million ($43,897 thousand) under the early retirement program were granted for theyear ended March 31, 2009. The total amount of all these costs is included within special losses as “Additional retirement allowance for early
retirement program” for the year ended March 31, 2009.

Assumptions used in calculating the above information are summarized as follows:
2009

2008

Discount rate Expected rate of return on plan assets 
Method of attributing projected benefits to periods of employee service 
Period of amortization of unrecognized actuarial gain 
Period of amortization of transition obligation 

2.5%
Mainly 2.5%
Straight-line basis
Mainly 12 years
12 years

2.5%
Mainly 2.5%
Straight-line basis
Mainly 12 years
12 years

7. 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 statutory income tax rate of approximately 40.7% for the years ended March 31, 2008 and 2009.
Tax losses can be carried forward for a seven-year period to be offset against future taxable income.
Significant components of deferred tax assets and liabilities at March 31, 2008 and 2009 were as follows:
2009

2008
(Millions of yen)

Deferred tax assets:
Tax loss carryforwards 
Accrued pension and severance costs 
Loss on impairment of fixed assets Allowance for doubtful accounts 
Devaluation on inventories 
Accrued bonuses 
Loss on disposal of fixed assets 
Other Total deferred tax assets 
Valuation allowance 
Total deferred tax assets, net of valuation allowance 30¥ 6,901
10,968
5,450
3,542
—
2,632
1,435
11,321
42,249(27,793)
14,456¥16,129
10,384
6,676
3,661
3,209
2,313
1,374
13,22356,969(40,611)
16,358

2009(Thousands of
U.S. dollars)$164,196
105,71167,96337,27032,66823,547
13,987
134,613579,955(413,428)
166,527

Notes to the Consolidated Financial Statements

2009

2008

2009

(Millions of yen)

Deferred tax liabilities:
Revaluation gain on subsidiaries 
Unrealized gain on securities 
Other Total deferred tax liabilities 
Net deferred tax assets (887)(1,476)(665)(3,028)¥11,428(Thousands of
U.S. dollars)

(887)
(442)
(2,146)(3,475)¥12,883(9,030)(4,500)(21,846)(35,376)$131,151

Deferred tax assets and liabilities that comprise net deferred tax assets are included in the accompanying consolidated balance sheets as follows:
2009

2008

2009

(Millions of yen)

Deferred tax assets (current assets) Deferred tax assets (investments and other assets) 
Other long-term liabilities (Thousands of
U.S. dollars)¥6,6296,548(294)¥5,381
6,356(309)$67,484
66,660(2,993)

In addition to the above, the Company recorded deferred tax liabilities on land revaluation surplus of ¥522 million ($5,314 thousand) at March
31, 2008 and 2009 separately.
Due to the recording of loss before income taxes and minority interests, the reconciliations of the differences between the statutory income tax
rate and the effective income tax rate for the years ended March 31, 2008 and 2009 have been omitted.
8. Appropriations of Retained Earnings
No cash dividends were proposed and approved at the ordinary general meeting of shareholders of the Company held on June 26, 2009.
The Company is required to obtain the approval of shareholders at an ordinary general meeting of shareholders for appropriations of retained
earnings in conformity with the Corporation Law. Appropriations of retained earnings are, therefore, not reflected in the consolidated financial
statements for the year to which they relate but are recorded in the consolidated financial statements in the subsequent year after shareholders’approval has been obtained.
9. Revaluation Surplus
A consolidated subsidiary of the Company revalued its land used for business purposes in accordance with the Land Revaluation Law, when it was anaffiliate. As a result of this revaluation, the Company recognized its portion of the affiliate’s revaluation surplus and the related deferred tax
liabilities.
10. Lease Transactions
The Company and its consolidated subsidiaries charge or credit to income periodic lease payments and receipts for finance leases that do not have
options to transfer ownership of the leased assets to the lessee. Such periodic lease payments under finance lease contracts totaled ¥1,884 millionand ¥1,108 million ($11,280 thousand), and receipts under finance lease contracts totaled ¥138 million and ¥112 million ($1,140 thousand) for theyears ended March 31, 2008 and 2009, respectively. Future lease payments and receipts under finance leases and non-cancelable operating leases,
including interest, at March 31, 2008 and 2009 are summarized as follows:
2009

2008

2009

(Millions of yen)

Lease payments:
Due within one year 
Due after one year 
Lease receipts:
Due within one year 
Due after one year (Thousands of
U.S. dollars)¥1,8603,999¥5,859¥1,010

¥ 112
45
¥ 157

¥

45

$

458

¥

45

$

458

2,076
¥3,086—$10,282
21,134$31,416—31

Notes to the Consolidated Financial Statements

Leased assets under finance leases, where lessors retain ownership of the leased assets, are accounted for as operating leases. If such leases had
been capitalized, then the cost of the assets, and the related accumulated depreciation (amortization), accumulated impairment loss and net
amount at March 31, 2008 and 2009 would have been as follows:
2008
Cost

Accumulated
depreciation/amortization¥ 9,603884¥10,487¥4,256391¥4,647

Accumulated
impairment loss

Netamount(Millions of yen)

Machinery and equipment 
Intangible assets ¥1,105—¥1,105¥4,242493¥4,735

2009
Cost

Machinery and equipment 
Intangible assets ¥5,497548¥6,045

Accumulated
depreciation/
Accumulated
amortization
impairment loss
(Millions of yen)

¥2,665308¥2,973Net
amount

¥26
—
¥26

Net
amount(Thousands of
U.S. dollars)¥2,806240¥3,046$28,566
2,443$31,009

Depreciation (amortization) for these leased assets computed using the straight-line method over the respective lease periods would have been
¥1,884 million and ¥1,108 million ($11,280 thousand) for the years ended March 31, 2008 and 2009, respectively.
Fixed assets, which are leased to other companies under finance leases without options to transfer ownership of the leased assets to the lessee atMarch 31, 2008 and 2009, are summarized as follows:
2008
Cost

Accumulated
depreciation

Net
amount(Millions of yen)

Machinery and equipment 

¥227

¥95

¥132
2009

Cost

Accumulated
depreciation

Net
amount(Millions of yen)

Machinery and equipment 

¥166

¥128

Net
amount(Thousands of
U.S. dollars)

¥38

$387

Depreciation for these leased assets computed using the straight-line method over the respective lease periods would have been ¥109 millionand ¥93 million ($947 thousand) for the years ended March 31, 2008 and 2009, respectively.
11. Derivatives
In the normal course of business, the Company and its consolidated subsidiaries utilize various derivative financial instruments in order tomanage the exposure resulting from fluctuation in foreign currency exchange rates, interest rates and the prices of aluminum ingot in the market.
The Company and its consolidated subsidiaries do not hold or issue derivative financial instruments for trading purposes.
At March 31, 2008 and 2009, there were no derivative financial instruments, except for those instruments to which hedge accounting wasapplied.
12. Research and Development Costs
Research and development costs charged to cost of sales and selling, general and administrative expenses for the years ended March 31, 2008 and2009 were ¥5,858 million and ¥5,972 million ($60,796 thousand), respectively.
13. Contingent Liabilities
Contingent liabilities at March 31, 2009 amounted to ¥5,171 million ($52,642 thousand) for loans guaranteed and other guarantees given in theordinary course of business, including ¥1,168 million ($11,890 thousand) shared by other joint guarantors, ¥376 million ($3,828 thousand) fornotes discounted, and ¥5 million ($51 thousand) for notes endorsed.

32

Notes to the Consolidated Financial Statements

14. Loss on Impairment of Fixed Assets
The Company and its consolidated subsidiaries recognized ¥11,839 million and ¥5,245 million ($53,395 thousand) of loss on impairment of fixed
assets, of which the significant items for the years ended March 31, 2008 and 2009, are presented below:
2008
Location

Takaoka City,
Toyama Prefecture and other

Major use

Manufacturing facilities forbuilding materials andrelated assets

Asset category(Millions of yen)

Machinery and equipment
Buildings and structures
Land
Other assets¥6,144
2,205
1,297
1,286

Since the cash flows generated from operating activities resulting from the use of the groups of assets have been continuously negative, after
having noted a sign of impairment and recognized it, the Company and its consolidated subsidiaries recognized ¥10,932 million as the related
loss. The recoverable amounts of the asset groups were measured at their respective value in use and cash flows were calculated at a discount rate
3.5%. In addition, the operating assets have been grouped by independent operating division, which generates cash flows, the rental assets byadministrative business division and idle assets by individual asset.
2009
Location

Funabashi City, Chiba Prefecture

Major use

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

Manufacturing facilities which
are planned to be out of use

Buildings and structures
Machinery and equipment¥1,951
1,088$19,862
11,076

In accordance with withdrawal from material producing department of Funabashi factory as part of summary and reorganization of production
bases, which aims to respond to severe business environment and increasingly intense competition of building material segment, the Company
and its consolidated subsidiaries recognized ¥3,039 million ($30,938 thousand) of the impairment loss. The facilities have been written down tomemorandum value, since they are planned to be out of use.
15. Net Loss Per ShareA reconciliation of the differences between basic and diluted net loss per share for the years ended March 31, 2008 and 2009 is summarized asfollows:
2008

Net loss 
Basic net loss 
Effect of convertible bonds 
Diluted net loss 

Net
loss
(Millions of yen)

Weighted
averagenumber ofshares(Thousands of shares)¥10,310
10,310—¥10,310542,732—
542,732

Net
loss(Millions of yen)

Weighted
averagenumber ofshares(Thousands of shares)¥31,442
31,442—¥31,442544,306—
544,306

Net
loss
per share(Yen)¥19.00¥ —2009

Net loss 
Basic net loss 
Effect of convertible bonds 
Diluted net loss (Yen)Net loss per share(U.S. dollars)¥57.77

$0.59

¥ —

$ —

Due to the recording of net loss, diluted net loss per share was not presented for the years ended March 31, 2008 and 2009.

33

Notes to the Consolidated Financial Statements

16. Business Combination
On April 1, 2007, the Company acquired 55% of the outstanding shares of common stock of M.C. Aluminum Co., Ltd. (“MCA”) in exchange for atransfer of certain of the Company’s assets and liabilities to MCA. The operating results of MCA have been included in the consolidated financial
statements since that date. MCA is engaged in production and sale of aluminum for die-cast products. Through this business integration, theCompany intends further growth in its corporate value with the synergy of the Company’s manufacturing technology and development capability
and MCA’s domestic and overseas production bases and business experience. Upon this transaction, MCA has changed its name to Nikkei MC
Aluminum Co., Ltd.
The acquisition cost amounted to ¥2,299 million, which consisted of MCA’s shares of common stock of ¥2,273 million and acquisition-related
direct costs of ¥26 million.
In connection with this transaction, the Company recognized negative goodwill of ¥83 million and fully amortized it during the year ended
March 31, 2008.
Assets acquired and liabilities assumed on the date of the business combination are summarized as follows:
2008(Millions of yen)

Assets:Current assets 
Non-current assets 
Total assets Liabilities:
Current liabilities Long-term liabilities 
Total liabilities ¥13,616
5,712¥19,328¥12,856634¥13,490

17. Segment Information
The Company and its consolidated subsidiaries operate within four distinct business segments mainly in Japan: “Aluminum ingot andchemicals,” “Aluminum sheet and extrusions,” “Fabricated products and others” and “Building materials.”
The “Aluminum ingot and chemicals” segment supplies aluminum primary and remelted ingot used for various industrial materials, andproduces a wide spectrum of aluminas and alumina hydrates ranging from raw materials to basic materials for ceramic compounds. The“Aluminum sheet and extrusions” segment produces sheet, coil, and extrusion products consisting primarily of shapes, tubes and rods. The“Fabricated products and others” segment produces a variety of products which include aluminum foil, aluminum powder, wing bodies fortransport vehicles, automobile components and electronic materials. The “Building materials” segment produces a wide range of materials
including sashes, curtain walls, and doors and fences for commercial and residential construction. “Corporate items” include unallocatedoperating expenses and corporate assets not specifically related to business segments.
Information by business segment for the years ended March 31, 2008 and 2009 was as follows:

Sales:
Customers Intersegment 
Total Operating expenses 
Operating profit (loss) 
Total assets 
Depreciation and amortization 
Loss on impairment of fixed assets Capital expenditures *1 Corporate items of ¥3,040 million are included.

34

Aluminumingot andchemicals

Aluminum
sheet andextrusions

2008
Fabricatedproducts
Buildingand others
materials(Millions of yen)

Eliminationor
corporate items¥156,189
88,331
244,520
235,348¥ 9,172¥131,598¥  3,944¥ —¥ 5,238¥ 79,375
33,311
112,686
111,056¥ 1,630¥ 75,859¥ 2,759¥ —¥ 5,165¥251,998
16,420268,418
255,206¥ 13,212¥220,952¥ 7,528¥50¥ 8,993¥—(142,072)(142,072)(139,032)*1¥ (3,040)¥ (11,931)*2
¥
90
¥
—
¥
82

*2 Corporate items of ¥23,096 million are included.

¥160,284
4,010
164,294
167,270¥ (2,976)¥123,995¥ 5,839¥ 11,789¥ 5,785

Consolidated¥647,846—
647,846
629,848¥ 17,998¥540,473¥ 20,160¥ 11,839¥ 25,263

Notes to the Consolidated Financial Statements

Sales:
Customers Intersegment 
Total Operating expenses 
Operating profit (loss) 
Total assets 
Depreciation and amortization 
Loss on impairment of fixed assets Capital expenditures *1 Corporate items of ¥3,009 million are included.

Sales:
Customers Intersegment 
Total Operating expenses 
Operating profit (loss) 
Total assets 
Depreciation and amortization 
Loss on impairment of fixed assets Capital expenditures 

Aluminumingot andchemicals

Aluminum
sheet andextrusions¥120,725
71,242
191,967
191,219¥ 748¥107,119¥ 4,965¥ 534¥ 5,662¥66,766
25,73492,50098,237¥(5,737)¥58,920¥ 4,271¥
4¥ 5,322

2009
Fabricatedproducts
Buildingand others
materials(Millions of yen)

¥226,543
15,640242,183
238,207¥ 3,976¥200,747¥ 8,879¥ 514¥ 11,065

Eliminationor corporate
items¥140,060
3,262
143,322
151,192¥ (7,870)¥109,283¥ 3,906¥ 4,193¥ 2,853

Consolidated¥—(115,878)(115,878)(112,869)*1¥ (3,009)¥ 2,502 *2
¥
92
¥
—
¥
95

¥554,094—
554,094565,986¥(11,892)¥478,571¥ 22,113¥ 5,245¥ 24,997*2 Corporate items of ¥22,886 million are included.

Aluminumingot andchemicals

Aluminum
sheet andextrusions$1,229,003
725,257
1,954,260
1,946,645$ 7,615$1,090,492$ 50,544$ 5,436$ 57,640$ 679,691
261,977
941,668
1,000,072$ (58,404)$ 599,816$ 43,480$
41$ 54,179*1 Corporate items of $30,632 thousand are included.

2009
Fabricatedproducts
Buildingand others
materials(Thousands of U.S. dollars)$2,306,251
159,218
2,465,469
2,424,993$ 40,476$2,043,642$ 90,390$ 5,232$ 112,644

Eliminationor corporate
items$1,425,837 $
—
33,208 (1,179,660)
1,459,045 (1,179,660)
1,539,163 (1,149,028)*1$ (80,118) $ (30,632)$1,112,522 $ 25,471 *2$ 39,764 $
937$ 42,686 $
—$ 29,044 $
967

Consolidated$5,640,782—
5,640,782
5,761,845$(121,063)$4,871,943$ 225,115$ 53,395$ 254,474*2 Corporate items of $232,984 thousand are included.

As more than 90% of sales for the years ended March 31, 2008 and 2009 were made in Japan, the disclosure of geographical segment
information has been omitted.
Export sales and operations outside Japan for the year ended March 31, 2008 and 2009 summarized as follows:
2008
Export sales andoperations
outside Japan

Consolidated
net sales(Millions of yen)

¥65,298¥647,846

Percentage ofconsolidated
net sales

10.1%

2009
Export sales andoperations
outside Japan

Consolidated
net sales(Millions of yen)

¥58,497¥554,094

Percentage ofconsolidated
net sales

10.6%

2009
Export sales andoperations
outside Japan

Percentage ofConsolidated
consolidated
net sales
net sales(Thousands of U.S. dollars)$595,511$5,640,782

10.6%

35

Report of Independent Auditors

36

OVERSEAS NETWORK

Overseas Subsidiaries and affiliates
North America
Nikkei MC Aluminum
America Inc.
Indiana, U.S.A.
Phone: 1-812-342-1141
Aluminum alloys(60%)

Toyal America Inc.
Illinois, U.S.A.
Phone: 1-815-740-3037
Aluminum powder and paste(100%)
EuropeToyal Europe Société par
Actions Simplifiée
Unipersonnelle
Accous, France
Phone: 33-5-59-983-535
Aluminum powder and paste(100%)

East Asia
Alcan Nikkei China Limited
Hong Kong, SAR, China
Phone: 852-2522-3001
Trading and marketing(49%)

Nikkei M.C. Aluminum(Kunshan) Co., Ltd.
Kunshan, China
Phone: 86-512-5763-1946
Secondary aluminum alloy(85%)
Nikkei (Shanghai) Body Parts
Co., Ltd.
Shanghai, China
phone: 86-21-5986-9388
Automobile components(100%)NI Nikkei Shenzhen Co., Ltd.
Shenzhen, China
Phone: 86-755-2650-5656
Automobile components(55%)

Southeast Asia
Nikkei MC Aluminum(Thailand) Co., Ltd.
ThailandPhone: 66-38-522296
Aluminum Alloys(79%)

Nikkei Siam Aluminium
LimitedThailandPhone: 66-2-529-0136
Aluminum sheet, foil
(100%)
Nikkei Singapore
Aluminium Pte. Ltd.
Singapore
Phone: 65-6222-8991
Trading and marketing(100%)
Thai Nikkei Trading Co., Ltd.
ThailandPhone: 66-2726-9001
Aluminum alloy, scrap(100%)

Nippon Light Metal (HongKong) Limited
Hong Kong, SAR, China
Phone: 852-2541-5563
Building materials(100%)
Nonfemet International(China-Canada-Japan)
Aluminium Co., Ltd.
Shenzhen, China
Phone: 86-755-2661-1569
Extrusion(18%)(As of July 31, 2009)37

Directors and Officers

Directors

Officers

Ichiro Okamoto

President
Representative Director

President
Chief Executive Officer

Takashi Ishiyama

Takashi Ishiyama

Directors

Supervision of Strategic Committee
for Product Commercialization andBusiness Development

General Manager of Technology &Development Group,Group Technology Center of Technology &Development Group and Central
Product Safety & Quality AssuranceDiv.

Makoto Fujioka
Mitsuru Ishihara
Mitsuaki Asano
Tadakazu Miyauchi
Ichiro Okamoto
Masao Imasu
Tsuyoshi Nakajima
Yoshinobu Hiki
Hidetane Iijima*
Kuniya Sakai** Outside Director

Auditors
Standing Statutory Auditors

Yoshihiko Hamabe
Hideki Nakamura
Outside Statutory Auditors

Yuzuru Fujita
Katsuo Wajiki
Yasuo Yuki

Senior Executive Officers

Makoto Fujioka
General Manager of Internal Control
Office, In Charge of Compliance,
Supervision of Auditing Office andLegal Dept., In charge of Environment
and Specific Projects for Group Sales

Mitsuru Ishihara
Divisional Manager of Chemicals,Supervision of Rolling Products Div.
Executive Officers

Officers

Tadashi Asahi
In Charge of Group Sales Promotion,
General Manager of Osaka/Nagoya
Regional Office

Toshihide Murakami
General Manager of Kambara Complex,
Divisional Manager of Capacitor Foil

Takashi Hara
Divisional Manager of Shaped Parts
and Metal & Alloy

Tadakazu Miyauchi

Hiroyasu Hiruma

Supervision of Heat exchanger Div.,
Metal & Alloy Div.,, Shaped Parts Div.,and Kambara Complex

General Manager of Personnel Dept.

Koji Ueno

Yasunori Okamoto
General Manager of Planning Dept., In
charge of China and Southeast Asia,
Supervision of Tomakomai Complex

Supervision of Personnel Dept.,
General Affairs Dept. and IR & Public
Relations, In Charge of Safety

Hirokazu Takatoku

Mitsuaki Asano

General Manager of Legal Dept., andCompliance Office

Supervision of Accounting Dept.,
Purchasing & Logistics Dept. andGroup Metal Center

Kotaro Yasuda

Atsushi Inoue

Minoru Sotoike

General Manager of Sheet & Extrusion
Fabricated Products Controlling Dept.,
Supervision of Panel Products andLandscape Products Dept.

Divisional Manager of Chemicals

General Manager of Accounting Dept.

Yasuhiro Sai
Divisional Manager of Rolled products(As of June 26, 2009)38

CoRPORATE DATAHead Office

Major Shareholders

NYK Tennoz Building
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
http://www.nikkeikin.co.jp
Phone: 81-3-5461-9211
Fax: 81-3-5461-9344(Ratio of Stock Holding)EstablishedMarch 30, 1939
Paid-In Capital¥39,085 million
Shares of Common Stock

Authorized: 1,600,000,000
Issued: 545,126,049
Number of Shareholders

60,542
Stock Exchange Listings

Tokyo, Osaka, Nagoya, Fukuoka, Sapporo
Transfer Agent of Common Stock

The Chuo Mitsui Trust & Banking Co., Ltd.
Last Shareholders’ Meeting

June 26, 2009

Japan Trustee Services Bank, Ltd.
(trust accounts 4G)(5.7%)
Japan Trustee Services Bank, Ltd.
(trust accounts)(4.1%)The Dai-ichi Mutual Life Insurance Co.
(3.7%)
Merrill Lynch Japan Securities Co., Ltd.
(3.3.%)The Master Trust Bank of Japan, Ltd.
(trust accounts)(3.0%)
Asahi Mutual Life Insurance Co.
(2.8%)The Light Metal Educational
Foundation, Inc.
(2.7%)
Nikkei-Keiyu-Kai(2.4%)
Namekawa Aluminium Co., Ltd.
(2.3.%)
Mizuho Corporate Bank, Ltd.
(2.1%)(As of March 31, 2009)

Cautionary Statement
This annual report contains various projections and estimates. Important factors that could alter these projections and estimates include
changes in the balance of aluminum supply and demand, fluctuations in the price of aluminum ingot and foreign exchange rates, aswell as shifts in Japanese government policies and regulations. The Company cautions, therefore, that the projections and estimates
contained herein involve risk and uncertainty, and that actual results could differ materially from those expressed or implied.
39

Nippon Light Metal Company, Ltd.
NYK Tennoz Building, 2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
http://www.nikkeikin.co.jp

Uses soybean ink inconsideration of the environment

Printed in Japan