NIPPON LIGHT METAL HOLDINGS COMPANY, LTD. ANNUAL REPORT 2019https://www.nikkeikinholdings.co.jp

Nippon Light Metal Holdings Company, Ltd.
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
https://www.nikkeikinholdings.co.jp

Printed in Japan

ANNUAL REPORT 2019Year ended March 31, 2019

Profile

Corporate Data

Since its establishment, the NLM Group has been Japan’s sole fully integrated aluminum manufacturer
offering varieties of products ranging from aluminum raw material to fabricated products.
Aluminum has properties that make it a superb industrial material: it is lightweight and has
excellent processability, corrosion resistance, thermal conductivity, and recyclability. Nippon Light
Metal applies its core strengths — a wealth of knowledge about aluminum and its characteristics andtechnological capabilities that have been developed over many years — to supply a highly diversified

Company Name

Major Shareholders

Nippon Light Metal Holdings Company, Ltd.
https://www.nikkeikinholdings.co.jp(Ratio of Stock Holding)
The Master Trust Bank of Japan, Ltd.
(trust accounts)(8.7%)

range of products to a number of key industrial sectors, including the automotive, electrical andEstablishedelectronics, information and telecommunication, environment, safety, energy,

October 1. 2012

construction, railroad, and food products industries.
By carrying on development of new applications for aluminum and aluminum materials, thePaid-In Capital

NLM Group is to continue to support customers in wide-ranging industrial sectors and contribute to¥46,525 million

improving the quality of people’s lives and protection of the environment.

Shares of Common Stock
Authorized: 2,000,000,000
Issued: 619,937,500

NLM Group

Number of Shareholders

Nippon Light Metal Holdings Company, Ltd. and its consolidated subsidiaries Years ended March 31

57,185
2019

2018

2019
Thousands of
U.S. dollars

Millions of yen

For the year:
Net sales 
Operating profit Profit attributable to owners of parent ¥481,439 ¥500,451 $4,508,974
29,89330,052
270,763
18,012
20,560185,242At year-end:
Total assets 
Net assets 
Short-term borrowings and long-term debt,
including bonds and capital lease obligation 
Net Sales

467,300
189,322481,303
202,735

4,336,454
1,826,606

141,494

143,742

1,295,090

Operating Profit

Stock Exchange Listings
Tokyo
Transfer Agent of Common Stock

35

500

400

28

400

300

21

300

200

14

200

100

7

100

The Dai-ichi Mutual Life Insurance Co.
(3.2%)
Japan Trustee Services Bank,Ltd(trust accounts 9)(3.2%)
Nikkei-Keiyu-Kai(2.6%)The Light Metal Educational Foundation, Inc.
(2.4%)
Asahi Mutual Life Insurance Co.
(2.1%)

Sumitomo Mitsui Trust Bank, Ltd.
Last Shareholders’ Meeting

JPMC GOLDMAN SACHS TRUST JASDEC
LENDING ACCOUNT (1.9%)

June 25, 2019
Mizuho Bank, Ltd.
(1.8%)

Total Assets

500

Japan Trustee Services Bank, Ltd.
(trust accounts)(8.7%)

Japan Trustee Services Bank,Ltd(trust accounts 5)(1.7%)(As of March 31, 2019)

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, as well
as shifts in Japanese government policies and regulations. The Company cautions, therefore, that the projections and estimates contained

0

2014

2015

Billions of yen

2016

2017

2018

2019

Years ended March 31

0

2014

2015

Billions of yen

2016

2017

2018

2019

Years ended March 31

0

2014

2015

Billions of yen

2016

2017

2018

2019

herein involve risk and uncertainty, and that actual results could differ materially from those expressed or implied.

As of March 31

57

Contents
Consolidated Financial Highlights.................................................................................. C2
To Our Shareholders......................................................................................................... 2
Special Feature................................................................................................................. 5
NLM Group Topics............................................................................................................ 8
Our ESG Approach............................................................................................................ 9
NLM Group......................................................................................................................... 15
Review Of Operations...................................................................................................... 16
Consolidated Six-Year Summary.................................................................................... 20
Financial Review............................................................................................................... 22
Consolidated Balance Sheets........................................................................................ 24
Consolidated Statements Of Income............................................................................. 26
Consolidated Statements Of Comprehensive Income................................................ 27
Consolidated Statements Of Changes In Net Assets................................................. 28
Consolidated Statements Of Cash Flows...................................................................... 29
Notes To Consolidated Financial Statements.............................................................. 30
Report Of Independent Auditors.................................................................................... 54
Overseas Network............................................................................................................ 55
Directors And Officers..................................................................................................... 56
Corporate Data.................................................................................................................. 57

2019

2018

2019

yen

U.S. dollars

Per share data (yen and dollars):
Net profit —basic 
Cash dividends 
Net assets ¥29.098.00
280.93¥33.209.00
303.37$0.300.08
2.73

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

¥353
228

¥305
200

$2.751.80

Note: U.S. dollar amounts have been translated,for convenience only,at the exchange rate of ¥110.99=U.S.$1.00.See Note 2 of the Notes to the Consolidated Financial Statements.

Net profit per Share

Net Assets per Share

Cash Dividends per Share

35.0

350.0

10.0

28.0

280.0

8.0

21.0

210.0

6.0

14.0

140.0

4.0

7.0

70.0

2.0

0
Yen

2014

2015

2016

2017

2018

2019

Years ended March 31

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

0
Yen

2014

2015

2016

2017

2018

2019

Years ended March 31

0
Yen

2014

2015

2016

2017

2018

2019

As of March 31

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

1

To Our Shareholders

Ichiro Okamoto, President & CEO

I would like to take this opportunity to extend my sincere gratitude to ourshareholders for their continued support of our business operations.
I hereby report on the operating results for Nippon Light Metal Holdings Company, Ltd.
(“NLM Holdings”) for fiscal 2018 (the year from April 1, 2018 to March 31, 2019).

2

Business Environment of Fiscal 2018
During the fiscal year under review, the domestic aluminum
industry saw an increase in demand for cars and building
materials, but demand for cans decreased. As a result, overall
aluminum demand remained virtually unchanged from theprevious year. Aluminum ingot prices continued a downward
trend after a sharp increase at the beginning of the year, but
on a full-year basis, they remained at almost the same level as
the previous year.
Three Basic Policies in the Mid-Term
Management Plan and Initiatives in Fiscal 2018
Under such circumstances, the NLM Group (the “Group”)
strove to maximize consolidated net sales and strengthen thefinancial position in accordance with the three basic policies
in the Mid-Term Management Plan (“MTMP 2016”), a threeyear plan covering the period from April 2016 to March 2019.
Under the first basic policy in MTMP 2016, “create new
products and business models by strengthening cooperation
within the Group,” we pursued creation of complex anddifferentiated new products and new business models by
thoroughly pursuing Group-wide cooperation. We created new
products and businesses by leveraging the Group’s strengths
in diverse fields. Among them are battery cooling plates forelectric vehicles (EVs) and plug-in hybrid vehicles (PHEVs),
products related to lithium ion batteries, products related
to semiconductor manufacturing equipment, and soundabsorbing materials for interior finishing and ceilings.
In implementing the second basic policy in MTMP 2016,“business development through strategies by region and bysector,” we channeled management resources into fields
selected in view of the matrix of regions and market sectors
and strove to maximize return on investment. To cite someexamples, in Japan we improved the manufacturing system
for truck outfitting, invested to increase production ofmaterials for semiconductor manufacturing equipment, andincreased production lines for CFC-free thermal insulated
incombustible panels. In addition, we made Sumikei-Nikkei
Engineering Co., Ltd. a subsidiary through acquisition of
additional shares. Overseas, we established a second factoryin Thailand to manufacture secondary alloy products forautomotive applications. In India, we established a joint
venture company to manufacture aluminum paste forgeneral purpose paints and acquired an equity stake in a
major manufacturer of fabricated foil for pharmaceuticalpackaging. In North America, we established a marketing baseand accelerated our efforts to start commercial operation.

Under the third basic policy in MTMP 2016, “strengtheningof corporate culture (strengthening of business foundations),”
the chemicals business, which had been a cause for concern,
improved its profitability mainly owing to an increase in highvalue-added products and revisions to product prices. The
earnings structure of the aluminum sheet business improved
owing to greater production capacity for high value-added
products and securing of new orders. The earnings structureof Toyo Rikagaku Kenkyusho, which is engaged in sheet
fabrication, improved mainly because of streamlining of the
production system and improvement of the non-defective
rate as a result of establishment of the Group support system.
At overseas sites, the trailer business in China and the panel
business in Thailand became profitable in terms of ordinary
profit.
Overview of Consolidated Financial Results
As a result of the initiatives described above, net sales increased
3.9% year on year to ¥500.5 billion. Operating profit increased
0.5% year on year to ¥30.1 billion, ordinary profit increased
5.3% year on year to ¥31.1 billion, and profit attributable toowners of parent increased 14.1% year on year to ¥20.6 billion.
Year-end dividend payment will be ¥5 per share, which,combined with the interim dividend of ¥4 already paid, willbring annual dividend payment to ¥9 per share (an increase of¥1 from the previous year).
Overview by Business Segment
Net sales in the Aluminum Ingot and Chemicals segment
increased 5.3% year on year to ¥117,008 million andoperating profit increased 7.4% year on year to ¥9,616 million.
In the Alumina and Chemicals segment, domestic sales ofmainstay aluminum hydroxide and alumina-related products
were robust. In the Aluminum Ingot segment, regarding thecore secondary alloy products for automotive applications
business, both domestic and overseas sales increased. Profit of
the Alumina and Chemicals segment increased partly due toan increase in high value-added products and price revisions,while profit of the Aluminum Ingot segment also increased
mainly due to improved productivity caused by full-scale
operation of the second factory in Thailand.
Net sales in the Aluminum Sheet and Extrusions segment
increased 0.8% year on year to ¥107,835 million andoperating profit decreased 26.8% year on year to ¥7,152
million. In the Aluminum Sheet segment, sales volumesof thick plates and fabricated parts for semiconductor
manufacturing equipment and fabricated sheet products for3

To Our Shareholders

PC and tablet cases decreased. In the Aluminum Extrusions
segment, sales of products related to environmentally friendly
vehicles and those of products related to automotive parts in
China were robust, but sales of mainstay products for truck
outfitting were relatively weak. Profits decreased significantly
mainly owing to increases in the prices of raw materials
and fuel in addition to the decrease in sales of the products
mentioned above.
Net sales in the Fabricated Products and Others segment
increased 6.7% year on year to ¥180,259 million andoperating profit increased 19.4% year on year to ¥11,681
million. In the truck outfitting business, sales volume
remained virtually unchanged from the previous fiscal year,
but both sales and profits decreased mainly owing to anincrease in the ratio of products for compact trucks and anincrease in material prices. In the heat exchanger business,sales increased greatly because of brisk sales of products
related to environmentally friendly vehicles in addition
to robust demand for capacitors for air conditioners. In
the Electronic Materials segment, sales decreased because
anodized aluminum foil for aluminum electrolytic capacitors
saw sales decrease as they entered a phase of inventory
adjustment in the second half in line with the slowdown of
the Chinese economy after they enjoyed robust demand in thefirst half. However, profits increased because of the impact
of productivity improvement in addition to the increase insales in the first half. In the Panel System segment, both sales
and profits increased, reflecting continued brisk demand forpanel systems for food processing plants and low-temperature
distribution warehouses and an increase in sales of panel
systems for clean rooms for medical and pharmaceuticalapplications due to wider adoption of the panel methodthat leads to labor saving in construction. In the LandscapeEngineering segment, business was brisk, including an
increase in sales of new products for roads and bridges. In
the Carbon Product segment, both sales and profits increased
significantly because sales of our major products including
carbon blocks for blast furnaces and electric furnaces
increased, reflecting strong performance of companies in thesteel industry, which are our main customers.
Net sales in the Aluminum Foil, Powder and Paste segment
increased 1.0% year on year to ¥95,349 million and operating
profit increased 5.3% year on year to ¥5,114 million. In
the Aluminum Foil segment, demand for fabricated foil for
pharmaceutical packaging and water-repellent fabricatedfoil for food products showed little growth, but sales ofantenna circuit foil for IC cards, plain foil for lithiumion battery surfaces, and aluminum foil for converters
were buoyant, resulting in higher sales and profits of the4

Aluminum Foil segment. In the Powder and Paste segment,
sales volume decreased in Japan and China reflecting
sluggish sales of mainstay silver-colored paste products forautomobile paint, while sales of our proprietary Colored
Alpaste expanded mainly in overseas markets. Sales ofpowder products remained robust, such as sales of aluminum
nitride for heat dissipation substrate. As a result, net sales
and operating profit of the Powder and Paste segment werevirtually unchanged from the previous year. In the Solarsegment, sales of functional ink products for solar cells
were brisk, but sales volume of back sheets for solar cells
decreased greatly, reflecting intensifying price competition
as well as the shrinkage of the Chinese market following the
Chinese government’s revision of its measure for supporting
introduction of solar power generation systems. As a result,both sales and profit of the Solar segment decreased.
Outlook for Fiscal 2019
The global economic outlook will likely become increasingly
uncertain due to risks such as the development of tradeissues with the slowdown of the Chinese economy, and theimpact of Brexit. The outlook for the Japanese economy
permits no optimism in view of concerns over a possible dip in
consumption in line with the increase of the consumption tax
rate as well as the slowing of the world economy.
Under such circumstances, the Group formulated a new Midterm Management Plan that covers a period from April 2019 toMarch 2022. (For details, please refer to the Special Feature on
Pages 3-4.) The goal is to maximize consolidated net sales andprofits through creation of new products and new businesses,
investment of resources for growth, and strengthening of the
management foundation.
The Company projects net sales of ¥510.0 billion, operating
profit of ¥31.0 billion, ordinary profit of ¥30.5 billion, andprofit attributable to owners of parent of ¥20.0 billion in fiscal
2019.
I would like to ask for the continuous support ofshareholders in our efforts, just as we would do everything in
our power to further develop the Group.
June 2019

President & CEO
Ichiro Okamoto

Special Feature : NLM Group’s 2019 Mid-Term Management Plan (a three year plan)—Aiming for further growth as a “Groundbreaking Innovator of Aluminum and Beyond”—

Nippon Light Metal Holdings formulated the NLM Group’s 2019 Mid-Term Management Plan covering the three
years from April 2019.
Fiscal 2018
(Targets of MTMP 2016)

Net sales
Operating profit
Ordinary profit
Profit attributable to owners of parent
Interest-bearing debt
D/E ratio (times) *1
ROCE (%) *2¥500.0 billion
32.0
31.0
20.0
160.0
1 or lessOver 10%

Fiscal 2018
(Actual results)¥500.5 billion
30.1
31.1
20.6
139.6
0.7
10.8

Fiscal 2021
(Targets of MTMP 2019)¥540.0 billion
37.5
37.0
24.0
—
1 or less
11.4[Assumptions for MTMP 2019] Aluminum ingot market price: ¥260/kg Exchange rate: 1.00 U.S. dollar = 110.00 yen*1 D/E ratio (Ratio of interest-bearing debt to equity): Interest-bearing debt / Shareholders’ equity*2 ROCE (Return on capital employed): Ordinary profit before deduction of interest expenses / Capital employed (Shareholders’ equity + Interest-bearing debt –Cash and deposits)

I. Review of 2016 Mid-Term Management Plan

Under the 2016 Mid-Term Management Plan covering the three years from April 2016 (the “MTMP 2016”), the NLM Group
strove to maximize consolidated net sales and strengthen the financial position in accordance with the three basic policies,
namely, “create new products and business models by strengthening cooperation within the Group,” “business development
through strategies by region and by sector,” and “strengthening of corporate culture (strengthening of businessfoundations).”
As a result, the Group achieved its targets for net sales, ordinary profit, and profit attributable to owners of parent for the
final year of MTMP 2016, although operating profit fell short of the target. In terms of the key financial performanceindicators, the Group achieved all targets partly as a result of the conversion of the share acquisition rights of convertiblebond-type bonds with share acquisition rights into shares in addition to the solid profit level. The annual dividend payment
for fiscal 2018 will be ¥9 per share, exceeding the forecast at the beginning of fiscal 2018 by ¥1.
II. Overview of 2019 Mid-Term Management Plan

The Group formulated and launched a new Mid-Term Management Plan (the “MTMP 2019”) covering the period from April
2019 to March 2022 with the aim of achieving sustainable growth and enhancing corporate value over the medium to longterm in accordance with the Mission of the NLM Group (Management Philosophy), “Be forever committed to thedevelopment of new applications for aluminum and aluminum-related materials and thereby contribute to the improvementof people’s quality of life and environmental protection.”
1. Basic Policies❶ Create new products and businesses
Create new value for all customers by thoroughly pursuing Group-wide cooperation
Develop products and businesses, taking advantage of the supply chain with manufacturing at the core

NLM Group companies are executing business in wide-ranging fields related to aluminum and the Group has comprehensive
capabilities extending from design, installation, and services to after-sales services and maintenance in addition to
manufacturing. Capitalizing on these comprehensive capabilities, we will thoroughly pursue Group-wide cooperation
involving suppliers to create competitive new products and businesses attuned to market needs and offer such products to anever-broader customer base. Specifically, our emphasis will be on products related to environmentally friendly vehicles,
products related to lithium-ion batteries, products related to medical and pharmaceutical applications, truck outfitting andother service businesses, and bridge-related products that will contribute to the strengthening of infrastructure.
5

Special Feature : NLM Group’s 2019 Mid-Term Management Plan (a three year plan)

Application fields

Companies

Environmentally friendly
vehiclesAutomotive/transport

Nippon Light Metal and Nikkeikin Aluminium CoreTechnology

Lithium-ion batteries

Automotive, electrical/electronics, andenvironment

Nippon Light Metal, Toyo Aluminium, Nikkeikin
Aluminium Core Technology, and Nippon Electrode

Medical and pharmaceutical

Electrical/electronics, food/healthcare, etc.

Nippon Light Metal, Toyo Aluminium, and Nikkei Panel
SystemExtension of the lifespan of
infrastructure

Civil engineering/landscaping

Nippon Light Metal, Nikkeikin Aluminium CoreTechnology, and Sumikei-Nikkei Engineering

Stock

Automotive/transport, food/healthcare, etc.

Nippon Fruehauf and Nikkei Panel System❷ Invest resources for growthMore vigorously invest resources into fields and regions where the Group’s strengths can be utilized
Manage the Group’s organizations agilely and utilize external resources according to businesses

In view of the Group’s current situation, we will invest resources more vigorously with the aim of achieving further growth.
Based on our “Start small and let it grow” policy, we will identify market trends and execute aggressive investment in fields
and regions where the Group’s strengths can be best utilized. Specific plans in Japan include capital investment in products
related to environmental needs and construction of the Engineering Development Center for the Panel System segment.
Plans overseas include establishment of manufacturing/sales sites for the automotive field in North America and India andcapital investment related to environmentally friendly vehicles in China.
In order to execute aggressive investment, we will manage organizations according to individual businesses with agility
and utilize external resources as necessary.
RegionBusiness development

Japan

Capital investment for new products,
investment for capacity expansion

Integrated system, technological development
capabilities

Automotive, batteries,
thermal, environment, etc.

Japan

Construction of the Engineering
Development CenterNo. 1 market share, capabilities to handle large
projects, network for engineering/installation

Food/healthcare, electrical/
electronics

China

Capital investment for new products

Extrusion of complex shapes, high-precision extrusion,
Automotive, thermal
machining, high-frequency bonding, assembly

India

Establishment of a manufacturing/sales site

Alloy development, collaboration

Automotive

Design, alloy, casting, forging, fabrication

Automotive

North
Establishment of a manufacturing/
America sales site

Strength

Application field❸ Strengthen the management foundation
Give top priority to safety and ensure compliance and quality
Enrich human resource to improve corporate value sustainably

Based on our “safety first” policy, we aim to create healthy and safe workplaces and eliminate occupational accidents. At thesame time, we will remind employees of the Group as well as people outside the Group engaged in the Group’s businessactivities of the importance of ensuring compliance and quality for smooth business activities.
Human resources are the foundation of our business operations. We will strive to develop and retain human resources byvigorously addressing flexible workstyles and improvement of the workplace environment. Moreover, through further
6

promotion of diversification of human resources and workstyle reform, we will strive to enable every employee todemonstrate his or her full potential, taking responsibility for and pride in his or her work.
We will also vigorously invest resources in safety and environmental measures and manpower saving and labor saving,
besides awareness raising and education and training, in order to achieve sustainable growth and co-existence with society.
In implementing the action plan based on the above-mentioned basic policies, the Group plans to make capital
investment of over ¥80.0 billion during the period covered by MTMP 2019, which exceeds the Group’s capital investment
during the period covered by MTMP 2016. We are committed to making a Group-wide effort to enhance corporate value andshareholders’ common interest.
2. Financial policy and shareholders return

The Company’s basic policy on distribution of profits is to pay dividends to shareholders, taking into consideration
consolidated financial results and other factors in a comprehensive manner from a medium- to long-term perspective whilestrengthening the financial position and the management foundation. We use the total return ratio* including sharebuybacks as the indicator for profit distribution and determine the amount of dividend to achieve a total return ratio of
approximately 30%.
Note: Total return ratio in fiscal year n (%) =(Total amount of dividend paid in fiscal year n) + (total amount of share buybacks in fiscal year n+1)
Profit attributable to owners of parent in fiscal year nMoreover, we will secure internal reserve in order to strengthen the
management foundation, including R&D and human resources
development, and to prepare for business development for
the future, in addition to investment for businessexpansion in growth fields and for stimulating
demand in the infrastructure business field
and for expansion of the earnings power,
so as to enhance corporate value.

Ichiro Okamoto President & CEO

7

NLM Group Topics

Toyo Aluminium starts full-scale operation of a continuous caster for development and mass
production of high-performance foil
— Japan’s first continuous caster dedicated to aluminum foil greatly enhances strength and elongation —In November 2018, Toyo Aluminium started full-scale operation of acontinuous caster dedicated to foil at its Kanbara Works. This is thefirst continuous caster (CC) dedicated to aluminum foil. The CC test
plant will be used for new product development and mass production ofhigh-spec foil, which cannot be produced with the conventional direct
chill casting (DC).
Total investment amounted to approximately ¥900 million, including
for the purpose-built building and auxiliary facilities. Since the need fora hot rolling mill, which would occupy a large space, is eliminated, theinitial cost for CC is less than one tenth of that for DC. Moreover, bycooling aluminum melt and rolling, CC produces aluminum sheets at a
speed approximately 100 times faster than DC, enabling development ofhighly functional materials with a high degree of strength, elongation,
conductivity, exothermicity, and other features previously unavailable
while also making it possible to respond flexibly to such needs as
product miniaturization and shape diversification.
One of the major foil markets Toyo Aluminium is targeting is that forplain foil for lithium-ion-battery surfaces. Toyo Aluminium already has a
70-80% market share in Japan and the largest share in the global

market as well. In view of aluminum foil’s great potential as analternative to copper foil, steel foil, and other metal foil in view of its
cost advantage, Toyo Aluminium aims to expand the market.

Continuous caster starts full-scale operation at Kanbara Complex

Nippon Fruehauf establishes joint venture company in the Philippines— Third site for manufacturing freezer/refrigerator truck bodies in the China and Southeast Asia region —In January 2019, Nippon Fruehauf (“NFH”) reached an agreement with
Centro Manufacturing Corporation (“Centro”), which is engaged in thetruck outfitting business in the Philippines, and other partners toestablish CENTRO NIPPON FRUEHAUF COOLTECH INCORPORATED, a
joint venture company.
The Philippines has been achieving high economic growth in recent
years. Triggered by the 2015 order for enforced replacement of used
vehicles, further expansion of the cold chain market in the Philippines is
expected. It is in this context that NFH has cultivated a fruitful business
relationship with Centro by granting of a license to Centro in 2016 andbegan supplying wing body kits from Shandong Conglin Fruehauf
Automobile to Centro in the same year.
Utilizing NFH’s expertise in manufacturing of temperature-controlled
vehicles and Centro’s knowhow in outfitting attuned to local needs, the
new company will promote local production of high-quality, lightweight,
highly durable compact bodies for compact vehicles, which account for
7 0% of the cold chain market in the Philippines. Moreover, while
seeking to expand earnings at an early stage by capitalizing on Centro’s
powerful sales network, CENTRO NIPPON FRUEHAUF COOLTECH isworking with Fruehauf Mahajak in Thailand to further raise awarenessof the Fruehauf brand in Asia.

8

Signing ceremony in the Philippines for establishment of the new company (January 2019)

Overview of the joint venture company
Company name : CENTRO NIPPON FRUEHAUF COOLTECH INCORPORATED
Paid-in capital : 100 million Philippine pesos (approximately ¥200 million)
Ownership ratio : Centro Manufacturing Corporation����������������������������������������� 66%: Nippon Fruehauf Co., Ltd.�������������������������������������������������������� 30%: Fruehauf Mahajak Co., Ltd.������������������������������������������������������� 4%
Establishment : July 2019
Location: Manila, the Philippines

Our ESG Approachexamining an issue from multiple perspectives. Among such issues,
matters of particular importance are deliberated and determined at
Board of Directors meetings.
The Board of Directors of the Company consists of 13 directors, ofwhom four are independent outside directors. Twelve Board of
Directors meetings were held in fiscal 2018. To ensure agile
management and sufficient deliberation by the Board of Directors,
an executive officer system has been adopted to separate the tasks ofmanagement and execution.
From the viewpoint of maintaining the institutional
independence of the auditing function, the Company has establisheda Board of Auditors, which consists of six statutory auditors, ofwhom three are independent outside auditors. Eleven Board ofAuditors meetings were held in fiscal 2018. Also, there is an
employee designated to exclusively provide assistance for auditing
duties.

GOVERNANCE
Introduction
Nippon Light Metal Holdings Company, Ltd. (the “Company”) is aholding company listed on the First Section of the Tokyo Stock
Exchange. It has formed the “NLM Group” which consists of 77
consolidated subsidiaries, with Nippon Light Metal Company, Ltd.
(“NLM”) and Toyo Aluminium K.K. as the core business companies,
and 16 affiliates accounted for by the equity method. The NLMGroup engages in business revolving around the manufacture andsale of aluminum products and related products.

Governance Structure
The NLM Group’s basic approach to management is systematized in
the Group management policy, which consists of three pillars and 13
basic policies.
Regarding the governance of the Group, while respecting theautonomy of each company, management is carried out based on
the Group regulations, etc. stipulated by the Company. For mattersthat affect the entire Group, an Executive Committee which consistsof members including the Company’s directors makes decisions afterCommunication with Stakeholders
The NLM Group values sharing information and exchanging
opinions through communication with stakeholders, and opinions it
receives are reported to persons responsible for the respective

Figure 1 Governance Structure
NLM’s CORPORATE GOVERNANCE STRUCTURE
General Meeting of Shareholders
Appointment / removal

Audit reports

Appointment / removal

Appointment / removal

Directors
Outside directors

Audit reports

Board of Directors
Appointment/ removal

Accounting Accounting
auditoraudit

President and CEOGroup Executive
Committee

Officers• Compliance Committee• CSR Committee• Quality Committee• Environment Committee

Operations,subsidiaries and affiliates
Reports andproposals
Information exchange

Board ofauditors

Appointment / removal

Statutory
auditorauditsAuditors
Outsideauditors

Internal
audit

Central CSR and Audit OfficeInformation exchange

Audit reports / information exchange

9Our ESG Approachbusinesses and business managers, and handled so that such
opinions are reflected in management.
Stakeholder

Method of communication

Employees

Share issues and exchange opinions through the labor
union, etc. Make regular communication mainly throughindividual personnel interviews, meetings, and various
events.

Customers

Persons responsible for sales and businesses shareissues and exchange opinions through usual businessnegotiations.

Business
partners

Persons responsible for purchase and businesses
share issues and exchange opinions throughopportunities such as usual business negotiations andbriefings for business partners.

Regional
society

Each business location maintains communication
through participation in local events and businesslocation events to which local residents are invited, etc.
Further, shares issues and exchanges opinions byholding regular and irregular briefings for residents inregions with a relatively large environmental impact, etc.

Shareholders Share issues and exchange opinions mainly throughand Investors general meetings of shareholders, financial results
briefings, individual meetings, and tours of businesslocations.
Overall

Discloses this report, CSR report, and various
communication tools principally on the website, andshares information and exchanges opinions throughtelephone, e-mail and other means.

The Company’s Board of Directors receives reports regarding thestatus of risk management every half-year, evaluates it, and issues
necessary instructions. What provides the basis of this step is auditsof more than 250 cases a year conducted within the NLM Group forall subsidiaries by a central supervisory department for each risk of
the Company. A specialized audit team is organized for each field
including quality assurance, environmental conservation, labor
management, information system, accounting and duties, andinternal control. Each audit team implements the audit plan, andresults of the audits, along with adjustments, are reported to theofficer in charge of risk issues, the Company’s President and CEO,the Board of Directors and the Board of Auditors.

Internal Control over Financial Reporting
To ensure financial reporting is conducted appropriately, aninternal control system related to financial reporting has been set up
and put into operation. These efforts are evaluated by an auditing
department with the necessary auditing capabilities and whose
independence is secured. The status of design, operation andevaluation is reported to the statutory auditors, the accounting
auditor, and the Company’s Board of Directors, after which
adjustments are made as necessary.
In fiscal 2018, it was confirmed that the NLM Group’s internal
control continued to be effective.

Internal Control System
The Company’s Board of Directors has resolved the Basic Policy on
the Implementation of Internal Control Systems, and strives toenforce it thoroughly. Each company and department in the Grouphas designated a person in charge of internal control promotion andan internal control facilitator, to encourage the appropriate
establishment and usage of controls. The status of such efforts isreported to the Company’s Board of Directors every half-year, andguidance is provided as necessary.

Risk Management
The NLM Group’s risk management system responds to risks
classified into three categories: strategic risks related to businessstrategies, market and economic fluctuations, regulatory reforms,
etc.; operational risks related to product and service defects,
environmental accidentals, etc.; and hazard risks related to naturaland accidental disasters. In particular, major risks are specified,with a focus on operational risks. In order to respond flexibly toeach type of risk that arises, the Company’s central risk supervisorydepartment works with business companies and departments inhandling the risks.

10Compliance Program
The Company’s Compliance Committee is made up of the Company’s
directors and chaired by the President and CEO. The Committee’s
policies are embodied in the Compliance Promotion Plan, and theimplementation status of the plan is reported to the Committee every
quarter.
The NLM Group’s code of conduct is presented as the Group
Compliance Code, which has various requirements for all directors
and employees of the Group, including compliance with laws andregulations, corporate ethics and business etiquette, sensible
conduct, and active communication with stakeholders. To ensure
the thorough dissemination of this code, the Compliance Code ispublished as a handbook that is distributed to all directors andemployees, which allows them to carry it around with them at all
times.
Furthermore, to thoroughly disseminate the Compliance Codeand facilitate its understanding, compliance meetings are held twicea year at each workplace, where the repetitive learning method is
employed. Opinions are exchanged on topics including complianceproblems at one’s workplace and compliance violation cases in one’s

and other workplaces. In fiscal 2018, a total of 2,006 meetings were
held, and a total of 20,972 employees participated in such meetings(participation rate of 93%).
Besides setting up the NLM Group’s whistle-blower system at eachmajor company, the “NLM Hotline” has also been established as acommon whistle-blowing channel for the Group. Under thesesystems, whistleblowers are thoroughly protected so that they canreport any misconduct and illegal act without fear of retaliation.

Figure 2 Trend in Number of Cases Reported to
the NLM Hotline

case

28

30

20

10

0

13

14

15

2015

2016

2017

8

2014

2018 FYCSR INITIATIVESIntroduction
The CSR activities of the NLM Group are carried out based on the
CSR Promotional Plan adopted by the CSR Committee chaired by theCompany’s President and CEO, and the status of the activities isreported at the CSR Committee held twice a year and in the CSR
Report published every year, as well as published on the Company’s
website, etc.
The NLM Group’s CSR initiatives have also been valued byinvestors, and the Company has been selected as a constituent of the
MSCI Japan ESG Select Leaders Index of the Government Pension
Investment Fund (GPIF) and as a constituent of the SNAM
Sustainable Investment of Sompo Japan Nipponkoa AssetManagement Co., Ltd.

ENVIRONMENT
Environmental Management System
The NLM Group has established the Environment Committee,
chaired by the Company’s President and CEO. Besides formulating
the environmental policy and plans to promote environmental
conservation activities, the Environment Committee also monitors
the implementation of these activities at each site.

Material Balance
The areas in which the NLM Group’s business activities have thegreatest impact on the environment are greenhouse gases, recycling,water, and biodiversity. The main inputs at sites are water (23.9
million m³), energy (10.4 PJ of electric power, 6.2 PJ of fuel), andraw material (601 kilotons). The main outputs at sites are water(28.5 million m³), greenhouse gases (885 kilotons-CO2), and wastematerials (48.4 kilotons of recycled/reduced, 3.5 kilotons of landfill).

Reduction in Greenhouse Gas Emissions
Greenhouse gas emissions by the NLM Group in fiscal 2018 were 885
tons-CO2. A 5% reduction from the previous fiscal year was achieved
due to energy conservation efforts and the impact of slow down
shipments. The breakdown was 525 tons-CO2 for Scope 1, 350 tonsCO2 for Scope 2, and 2,044 tons-CO2 for Scope 3.
The NLM Group’s initiatives to reduce greenhouse gas emissions
aims to “reduce greenhouse gas emissions intensity per unit of sales
to 1.82 tons-CO2 per million yen by fiscal 2030” at the NLM Group’s
sites in Japan. The results for fiscal 2018 were 1.87 tons-CO2 per
million yen.

Figure 3 Greenhouse Gas Emissions(Scope 1+ Scope 2 only)
k ton-CO2
1000

Japan

804

796

768

747

Besides Japan

748 ★

500

98
0

2014

127
2015

135
2016

125
2017

137
2018

FY

★ We have received independent assurance by KPMG AZSA Sustainability Co.,
Ltd. regarding the reliability of the data.

11

Our ESG Approach

Water
In fiscal 2018, the NLM Group took in 23.9 million m3 of water(excluding seawater) and discharged 28.5 million m3 of water
annually.

Environmental Audit
The Company implements environmental audits conducted by thesupervisory department, in order to monitor the environmental
conservation efforts of each site and make adjustments as necessary.
Results of the audits are reported to the officer in charge ofenvironmental issues, and reported to and shared with the Executive
Committee, Environment Committee, etc. of the Company.

PEOPLE AND SOCIETY
Human Rights
The NLM Group conducts human right protection activities within
the scope of its influence. Regarding human right protection
activities within the Group, we conducted a fact-finding survey on all
Group employees in fiscal 2018 based on the roster of workers, andconfirmed that children under the age of 15 did not work in any of
the Group businesses.
Each year, NLM also conducts research on its transactional
business partners regarding CSR procurement, and confirms theirapproval of the CSR Procurement Policy including the NLM Group
Human Rights policies. The response rate of the 446 target
companies in fiscal 2018 was 51.8%. Furthermore, we check forhuman rights violations through on-site visits and interviews at the
manufacturing and factory sites of partners. Also, regardingaluminum virgin ingots, the Group’s main raw material, we haveobtained the signature of consent to the Group’s Human Rights
Policy from each of the smelting manufacturers in the world.

Labor Practices
The NLM Group positions its employees as its most important
stakeholders. We strive to create a safe working environment where
all employees can find joy and meaning in their work. Such efforts
revolve around realizing a workplace with zero work accidents, thatallows for good health and health improvement, and is free of
discrimination and harassment. To achieve goals including thepromotion of diversity and realization of work-life balance, we

12

promote participation of women in the workplace, expand theemployment of people with disabilities, and endeavor to reduce long
working hours. The status of these activities is monitored by the staffof the Company’s central supervisory department through labor
audits which cover 335 items. In fiscal 2018, initiatives concerning
long working hours and employment of people with disabilities werethe main focus of the investigation, and instructions were given asnecessary.

Fair Operating Practices
The NLM Group aims to conduct fair and transparent businessactivities while adhering to laws and regulations of each country
and region as well as international laws and regulations. In fiscal
2018, to prevent unfair competition and corrupt practices, thedissemination and entrenchment of anti-bribery rules wereadvanced through the compliance-oriented programs.

Involvement with Regional Communities
The NLM Group conducts its business activities in 178 regions of 11
countries. In each region, we aim to be a respectable corporation by
conducting fair and transparent business activities and harmonious
management while adhering to local as well as international laws
and regulations.
We are also actively involved in the development of regionalsocieties and make contributions in accordance with the Social
Contribution Policy of the NLM Group. In fiscal 2018, the NLMGroup participated in 371 community programs, and madecommunity investments of ¥168 million.

Figure 4 Trend in Amount of Expenditure forSocial Developments
Millions of yen
200

168

163
150

121

117

2014

2015

133

100
50
0

2016

2017

2018 FYData Section : ESG Related Data
Item
Environment
Amount of greenhouse gas emissions (Scope 1 and Scope 2)*1

Scope of Calculation

FY2016FY2017FY2018

Unit

Consolidated (Japan)*2

796
138
2,035
1,962
21
33
11
4
0
3
2.19
10.6
6.3
37.7
618
341
576
*15 23.7
30.8
119
40.9
3.9
0
3
4

804
128
1,994
1,926
22
28
11
4
0
3
2.09
10.8
6.3
35.5
576
473
520
23.5
28.6
97
37.3
3.5
0
0
10

★ 748

Ktons-CO2

137
2,035
★ 1,947
35
34
11
5
0
3
1.87
10.4
6.2
33.2
601
379
560
23.9
28.5
105
48.4
3.5
0
0
16

Ktons-CO2

187
013,126
1,529
73
9,091
2,433
7,879
1,135
2,506
1,331
235
40
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

190
0
12,855
1,540
90
8,992
2,233
8,058
1,198
2,243
1,089
231
36
—
—
—
—
—
—
—
—
—
—
—
—
—
—
596
7.1
197
401
3.5
88.4

208
0
13,316
1,640
95
9,087
2,494
8,399
1,271
2,282
1,095
229
40
0
0
108
15
2,153
559
3,150
833
2,878
671
1,975
276
646
52
692
7.8
211
490
5.6
83.8

Consolidated (besides Japan)*3

Amount of greenhouse gas emissions (Scope 3)
Breakdown of Scope 3 emissions*4 Category 1: Purchased goods and services*5
Category 2: Capital goods

Consolidated
Consolidated
Consolidated

Category 3: Fuel not included in Scope 1 or 2
Consolidated
Category 4: Upstream transportation and distribution Consolidated
Category 5: Waste generated in operation

Consolidated

Category 6: Business travel

Consolidated

Category 7: Employee commuting

Consolidated
Consolidated (Japan)

Greenhouse gas emission intensity per unit of sales*1 (Goal; 1.82 (FY2030)
Electricity and Steam
Energy consumption
Fuels

Consolidated
Consolidated

Consolidated
Energy consumption intensity per unit of sales
Consolidated
Weight of raw materials used in production
Consolidated
Amount of SOx emissions
Consolidated
Amount of NOx emissions
Consolidated
Total volume of water intake*6
Consolidated
Total volume of water discharged
Consolidated
Amount of COD emissions
Recycled/Reduced
Consolidated
Amount of waste and byproducts
discharged
Disposed (landfill)
Consolidated
Number of cases of lawsuits, penalties, or forfeitures concerning the environment Consolidated
Consolidated
Number of accidents concerning the environment*7
Consolidated
Number of complaints concerning the environment*8
Employees, etc.
Consolidated
Full-time directors and officers
Number of directors and officers

Number of employees*9
Breakdown by gender

FemaleEmployees

Consolidated

Total

Managerial

Consolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleU.S. and Europe

Consolidated

Male

Consolidated

FemaleAge less than 15

Consolidated

Male

Consolidated

FemaleFrom age 15 to 19

Consolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleFrom age 40 to 49

Consolidated

Male

Consolidated

FemaleFrom age 50 to 59

Consolidated

Male

Consolidated

FemaleAge 60 and above

Consolidated

Male

Consolidated

FemaleNonmanagerial

Breakdown by country/region

Japan
Asia

Breakdown by age

From age 20 to 29
From age 30 to 39

Number of new hires

Male

Consolidated

Total

Consolidated (Japan)

Percentage to employees

Consolidated (Japan)

Number of new graduates who were recruited
Number of those who left the company Total
Percentage to employees

Fixation rate at least 3 years in the company*10

Consolidated (Japan)
Consolidated (Japan)
Consolidated (Japan)
Consolidated (Japan)

Ktons-CO2
Ktons
Ktons
Ktons
Ktons
Ktons
Ktons
Ktons
tons-CO2/million yen
PJ
PJ
GJ/million yen
Ktons
Tons
Tons
million m3
million m3
Tons
Ktons
Ktons
cases
cases
cases
peoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplepeople%peoplepeople%%13

Data Section : ESG Related Data
Item
Employees, etc.
Number of those who were re-employed after retirement
Labor Union participation rate
Average age

Scope of Calculation
Non-consolidated (Nippon Light Metal Co., Ltd.)
Non-consolidated (Nippon Light Metal Co., Ltd.)
Consolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleAverage number of working hours per year

Consolidated (Japan)

MaleConsolidated (Japan)

FemaleAverage number of overtime hours per year

Consolidated (Japan)

MaleConsolidated (Japan)

FemaleAverage number of days of annual leave taken

Consolidated

Male

Consolidated

FemaleConsolidated

Male

Consolidated

FemaleNumber of employees who newly took childcare leave

Consolidated (Japan)

MaleConsolidated (Japan)

FemaleNumber of employees who newly took nursing care leave

Consolidated (Japan)

MaleConsolidated (Japan)

FemaleNumber of employees who used reduced working hour system due tochildcare or nursing care
Number of employees on leave due to mental health issues

Consolidated (Japan)

MaleConsolidated (Japan)

FemaleConsolidated (Japan)

MaleConsolidated (Japan)

FemaleAverage years of service

Average rate of annual leave taken

FY2016FY2017FY2018

26
100
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

8
100
39.1
36.9
11.5
7.7
2,146
1,974
324
161
9.9
9.7
52.5
71.6
1
55
2
1
0
61
34
2

8
100
39.9
37.4
11.8
8.0
2,157
1,871
302
150
9.9
9.6
57.8
73.4
6
66
4
2
1
66
59
9

Unit
people%years of age
years of age
years
years
hours/people
hours/people
hours/people
hours/people
days
days
%
%
peoplepeoplepeoplepeoplepeoplepeoplepeoplepeoplethousand yen/people%Average education/training expenses per year

Consolidated

—

29.2

24.9

Employment rate of people with disabilities*11

Non-consolidated (Nippon Light Metal Co., Ltd.)

2.47
2.05

2.59
2.03

2.63
1.93 %

9
8
43
9
0.46
0.00

12
8
65
5
0.56
0.27

23
16
64
5
1.05
0.54

Consolidated

14
2,230

15
2,102

28 cases
2,066 times

Consolidated

19,991

20,237

Consolidated

126
143

182
107

Consolidated

0
10
4

0
6
2

0 cases
8 cases
4 cases

Consolidated

163

133

168 million yen

Consolidated

88Non-consolidated (Toyo Aluminium K.K.)

SafetyNumber of workplace injuries*12

Lost-time injuries

Consolidated (Japan)
Consolidated (besides Japan)

Non-lost-time injury

Consolidated (Japan)
Consolidated (besides Japan)

Frequency rate of lost-time injuries*12*13

Consolidated
Non-consolidated (Nippon Light Metal Co., Ltd.)

Compliance, etc
Number of cases reported to the NLM Hotline*14
Number of meetings held
Compliance meetings
Number of participants

Number of patent publications*
Number of patent registrations*12
Quality assurance
Number of legal violations in the delivery of products/services
Number of reports of quality issues
Number of recalls
Community
Amount of expenditure for social contributions
GovernanceInterim and year-end dividend per share
12

Consolidated

Consolidated
Consolidated
Consolidated

cases
cases
cases
cases

number of
20,972 Total
participants

167 cases
92 cases

9 yen

The ★ mark indicates that a third party, KPMG AZSA Sustainability Co., Ltd., has provided independent assurance for the reliability of the data.
*1.From fiscal 2018, GHG emissions from main offices have been calculated.
*2.An error found in the calculation of GHG emissions (Japan) in fiscal 2017 has been corrected.
*3.The amount of CO2 emissions related to electricity is calculated by using CO2 emission factors by country included in “CO2 emissions from fuel combustion 2017” released by the IEA.
For calculating CO2 emissions related to fuels, we use the CO2 emission factor of Japan.
*4.The emissions are calculated by multiplying the activity amount by the CO2 emission factor published by the Ministry of the Environment and the Ministry of Economy, Trade and Industry.
*5.The Scope 3 Category 1 emissions are calculated based on the volume of purchase of the top three items in terms of purchase volume. Of the items, the aluminum ingots are thosepurchased by Nippon Light Metal Co., Ltd.
*6.The seawater intake quantity is not included.
*7.Environmental problems that affect external parties (such as the leakage of oil or chemicals)*8.Number of petitions from external parties (such as those regarding smell and noise)*9.Contract employees (full-time) are included.
*10.Percentage of employees who are still at the company as of April 1 in the year that is three years after they joined the company.
*11.As of June 1 immediately after the end of each fiscal year. The statutory employment rate is 2.2% (2.0% on and before March 31, 2018).
*12.During the calendar year (from January to December).
*13.Injuries that resulted in one or more days’ absence from work (excluding commuting injuries).
*14.All cases including cases that did not require investigations are reported.
*15.The scope is Japan only.

14

NLM Group
Nippon Light Metal Group consists of 81 subsidiaries and 23 affiliates (as of March 31, 2019).
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.
Nippon Light Metal Holdings Company, Ltd.

Aluminum
Ingot andChemicals(Manufacture and Sales)● Nippon Light Metal Co., Ltd.
● Aluminium Wire Rod Co., Ltd.
● Nikkei MC Aluminium Co., Ltd.
● Nikkei MC Aluminum America, Inc.
● Nikkei MC Aluminum (Thailand) Co., Ltd.
● Nikkei MC Aluminum (Kunshan) Co., Ltd.
● Iharanikkei Chemical Industry Co., Ltd.
● Guangxi Zhengrun Nikkei High Purity
Aluminium Technology Co., Ltd.
● CMR Nikkei India Pvt. Ltd.
(Manufacture and Sales)(Sales and Others)● Nippon Light Metal Co., Ltd.

● Nikkeikin Kakoh Kaihatsu Holdings● Toyo Rikagaku Kenkyusho Co., Ltd.
● Toyo Precision Appliance (Kunshan) Co., Ltd.

Aluminum
Sheet andExtrusions(Sales and Others)● Nikkei Sangyo Co., Ltd.
● Tamai Steamship Co., Ltd.

Co., Ltd.

● Nikkei Sangyo Co., Ltd.

● Nikkei Siam Aluminium Ltd.
● Nikkei Extrusions Co., Ltd.
● Nikkeikin Aluminium Core Technology Co., Ltd.
● Shandong Nikkei Conglin Automotive Parts Co., Ltd.
● Nikkei (Shanghai) Body Parts Co., Ltd.
● Riken Light Metal Industry Co., Ltd.
● Nonfemet International (China-Canada-Japan)

Aluminium Co., Ltd.

FabricatedProducts
and Others(Manufacture and Sales)(Sales and Others)● Nippon Light Metal Co., Ltd.

● Sumikei-Nikkei Engineering Co., Ltd.

● NLM ECAL Co., Ltd.

● Nikkei Information System Co., Ltd.

● Nikkei Sangyo Co., Ltd.

● Nikkei Logistics Co., Ltd.

● Nikkei Panel System Co., Ltd.

● Toho Earthtech Inc.

● Nikkei Matsuo Co., Ltd.
● Nippon Electrode Co., Ltd.
● Nippon Fruehauf Co., Ltd.
● Fruehauf Mahajak Co., Ltd.
● Shandong Conglin Fruehauf Automobile Co., Ltd.
● Nikkei Heat Exchanger Co., Ltd.

(Manufacture and Sales)● Toyo Aluminium K.K.
● Hunan Ningxiang JiWeiXin Metal Powder Co., Ltd.

Aluminum
Foil, Powder
and Paste● Toyal Zhaoqing Co., Ltd.
● Toyal America, Inc.
● Toyal MMP India Pvt. Ltd.
● Toyal Europe SASU
● Toyo Aluminium Ekco Products Co., Ltd.
● Sam-A Aluminium Co., Ltd.

C U S T O M E R● Consolidated subsidiaries: 77 companies● Affiliates accounted for by the equity method: 16 companies(As of March 31, 2019)15

Review of Operations
Consolidated
Net Sales

Aluminum Ingot and Chemicals
Profile Alumina and Chemicals segment produce aluminum hydroxide, alumina and chemicals
used in various fields. These products are used as raw materials for flame retardants, ceramics andother products and as industrial materials in paper and pulp manufacturing. Aluminum Ingot segment manufacture various kinds of aluminum alloys and enjoy an excellent
reputation for the development of high-performance alloys in response tocustomer requirements.

●

’18

3,000

’17

’18

’19

0

%

Millions of Yen• Aluminum• Aluminum hydroxide• Chemicals (chemical products)• Caustic soda
• Chlorinated chemical products• Aluminum ingot• Aluminum alloys

9,616

’17

6,000

30,000
0

9,000

8,954

60,000117,008

90,000111,100

12,000101,840

120,000

117,008

Principal Products

Consolidated Operating Profit(Millionsof Yen)10,126Net Sales(Millionsof Yen)23.4’19Overview of results for fiscal 2018

In the Alumina and Chemicals segment, mainstay aluminumhigh value-added products and revisions to product prices,hydroxide and alumina-related products saw domestic sales

net sales and operating profit of the Alumina and Chemicals

for coagulants and refractory materials remain robust, butsegment increased from the previous year.

exports decreased. As for chemicals, sales of organic chlorides

In the Aluminum Ingot segment, the mainstay secondary

decreased, but sales of coagulants and inorganic chlorides

alloy products for automotive applications saw domestic sales

increased. Partly due to the positive impact of an increase inincrease and sales overseas remain robust mainly in Thailand,
resulting in an increase in overall sales volume from theprevious year. Profits increased greatly mainly because of
improved productivity caused by full-scale operation of thesecond factory in Thailand as well as the increase in sales
volume.
As a result, in the Aluminum Ingot and Chemicals segment,
net sales increased 5.3% year on year to ¥117,008 million
and operating profit increased 7.4% year on year to ¥9,616
million.

Aluminum Billet

16

Review of Operations
Consolidated
Net Sales

Aluminum Sheet and Extrusions
Profile The NLM Group’s aluminum sheet and extrusions are used in a wide rangeof market sectors, for instance for automotive parts and railway cars in the transport industry
and for semiconductor and liquid crystal manufacturing equipment and photosensitive
drums in the electrical machinery and electronics industries. The Group applies technologies
and expertise accumulated over many years to actively develop products that meet userneeds and provides customers with high-performance sheets and extrusions.
Consolidated Operating Profit

60,0005,000

30,000

2,500

0

●

’17

’18

’19

0

%

Principal Products’17• Automobile suspension parts • Lead-free cut aluminum alloy• Quick freezing coagulated powder extruded materials• High-intensity molded aluminum sheet• Transport• Large structural materials for railway rolling stock• Flap for trucks
Electronics•• Thick plate for semiconductor and LCD manufacturing
equipment • Foil stock • Photosensitive drum materials• Industrial• Printing roll • Industrial materials• Building materials and • Aluminum honeycomb panel • Scaffolding
infrastructure materials • Building materials

7,152

7,500

Applications

21.5• Automobile
9,767

90,000107,835

10,000106,955

120,000

98,165(Millionsof Yen)

7,775

Net Sales(Millionsof Yen)107,835

Millions of Yen

’18

’19

Overview of results for fiscal 2019

In the Aluminum Sheet segment, sales volume of battery

Profits greatly decreased mainly owing to increases in the prices

materials for automotive applications increased, but salesof raw materials and fuel in addition to the decrease in sales

volumes of thick plates and fabricated parts for semiconductor

volume.

manufacturing equipment and fabricated sheet products forIn the Aluminum Extrusions segment, sales of products

PC and tablet cases decreased. As a result, net sales of therelated to environmentally friendly vehicles increased andAluminum Sheet segment decreased from the previous year.

sales related to automotive parts in China remained robust,
but sales of mainstay products for truck outfitting were
somewhat weak, resulting in segment sales virtually the sameas the previous year. Profits of this segment were also virtually
the same as the previous year, reflecting increases in the pricesof raw materials and fuel despite the contribution of new
products to profits.
As a result, in the Aluminum Sheet and Extrusions segment,
net sales increased 0.8% year on year to ¥107,835 million,
but operating profit decreased 26.8% year on year to ¥7,152
million.

Aluminum Sheet

17

Review of Operations
Consolidated
Net Sales

Fabricated Products and Others
Profile The NLM Group includes several companies that handle distinctive fabricated products.
In particular, Nippon Fruehauf’s truck bodies and Nikkei Panel
System’s commercial refrigerators and freezer panels enjoy an
excellent reputation for quality, and are market share leaders in their respective fields.
In addition, the Group provides familiar aluminum fabricated products, including anodized
aluminum foil for aluminum electrolytic capacitors, automotive parts, and carbon products.
Consolidated Operating Profit

100,000

11,681• Building materials
and infrastructurematerials

3,000

’17

’18

’19

0

’17

’18

’19

Overview of results for fiscal 2019
In the Transport-Related segment, net sales of the truck outfitting
business decreased from below the previous year’s level, owing toan increase in the ratio of products for compact trucks althoughsales volume remained virtually unchanged from the previous
fiscal year. Profits also decreased mainly owing to an increase inmaterials prices in addition to lower sales.
In the heat exchanger business, net sales increased greatly fromthe previous year because of brisk sales of products related toenvironmentally friendly vehicles in addition to robust demandfor capacitors for air conditioners for mini vehicles in Japan, ourmainstay market.
In the shaped parts business, demand for forgings for China andThailand increased, but sales of castings decreased, resulting in net
sales and operating profit virtually unchanged from the previous
year.
In the Electronic Materials segment, sales decreased from theprevious year because anodized aluminum foil for aluminumelectrolytic capacitors saw sales decrease as they entered a phase of
inventory adjustment in the second half in line with the slowdownof the Chinese economy after they enjoyed robust demand in
the first half. However, profits increased because of the impact of
productivity improvement in addition to the increase in sales in thefirst half.
●18• Transport• Electronics

6,000

50,0000

9,000Applications• Automobile
9,783

150,000

180,259

12,000169,019

200,000

154,684(Millionsof Yen)10,245Net Sales(Millionsof Yen)• Food and lifestyle180,259
Millions of Yen

36.0%

Principal Products• Cast and forged parts for automobiles• Heat exchangers for automobiles• Van truck bodies and trailers• Anodized foil for electrolytic capacitors• Clean rooms• Landscape engineering products• Solid truss structural materials (Aluminum truss)• Plant package for communication base stations• Panels for commercial refrigerators and freezers

In the Panel System segment, products for industrial
refrigerators and freezers saw brisk demand continue for panel
systems for food processing plants and for low-temperature
distribution warehouses, reflecting the trend in the food industry
toward larger facilities resulting from integration of production
and distribution centers and opening of centers near markets.
With regard to clean rooms, sales of panel systems for clean rooms
for medical and pharmaceutical applications increased owing towider adoption of the panel method that leads to labor saving inconstruction. As a result, sales and operating profit of the Panel
System segment exceeded the previous year.
In the Landscape Engineering segment, which handles
fabricated aluminum products for civil engineering, buildings
and infrastructure, sales of new products for roads and bridges
increased. In addition, sales remained brisk for products for urban
landscaping such as pedestrian decks adjacent to train stations andfor structures such as sluice gates and coverings.
In the Carbon Product segment, both net sales and operating
profit increased greatly from the previous year because sales ofour major products including carbon blocks for blast furnaces
and electric furnaces increased, reflecting strong performance ofcompanies in the steel industry, which are our main customers.
As a result, in the Fabricated Products and Others segment,
net sales increased 6.7% year on year to ¥180,259 million andoperating profit increased 19.4% year on year to ¥11,681 million.

Review of Operations
Consolidated
Net Sales

Aluminum Foil, Powder and Paste
Profile The core company in this segment is Toyo Aluminium K.K. The company has established its position as the leading manufacturer by using the features of aluminum to develop awide range of products beneficial to society, industry and daily life, including packaging forfood and pharmaceutical products, electronics, aluminum pastes, and materials for solar cells.
Expanding into new fields based on our own technology, we are marketing various kinds andtypes of materials and products of high functionality in both domestic and overseas markets.

4,500

50,0003,000

25,000

1,500

0

●

’17

’18

’19

0

’17

5,114

95,34975,00094,3656,000

93,692100,000

4,856

Consolidated Operating Profit(Millionsof Yen)5,478

Net Sales(Millionsof Yen)’18’19

Applications• Food and lifestyle• Electronics• Automobile• Environmental / Energy

19.1%

95,349Millions of Yen

Principal Products• Aluminum foil
• Aluminum foil for electrolytic capacitors• Powder and paste• Back sheets for solar cells• Electrode ink for solar cells

Overview of results for fiscal 2019

In the Aluminum Foil segment, demand for fabricated foil for

In the Powder and Paste segment, sales volume decreased inpharmaceutical packaging and water-repellent fabricated foil

Japan and China reflecting sluggish sales of mainstay silver-

for food products showed little growth, but sales of plain foil forcolored paste products for automobile paint, but sales of ourlithium-ion-battery surfaces and aluminum foil for converters

proprietary Colored Alpaste expanded mainly in overseas

were buoyant and sales of antenna circuit foil for IC cards

markets. Sales of powder products, such aluminum nitride forrecovered, resulting in higher net sales and operating profit ofheat dissipation substrate, were also buoyant. As a result, net

the Aluminum Foil segment compared with the previous year.

sales and operating profit of the Powder and Paste segment
were virtually unchanged from the previous year.
In the Solar segment, sales of functional ink products forsolar cells were brisk. However, reflecting intensifying pricecompetition as well as the shrinkage of the Chinese market
following the Chinese government’s revision of its measure
supporting introduction of solar power generation systems,
sales volume of back sheets for solar cells decreased greatly,
despite implementation of countermeasures, such as engaging
in contracted production of other companies’ products. As aresult, both net sales and operating profit of the Solar segment
decreased from the previous year.
As a result, in the Aluminum Foil, Powder and Paste segment,
net sales increased 1.0% year on year to ¥95,349 million andoperating profit increased 5.3% year on year to ¥5,114 million.

Aluminum Foil

19

Consolidated Six-Year Summary
Nippon Light Metal Holdings Company, Ltd. and its consolidated subsidiaries Years ended March 31

Gross Profit and Gross Profit Margin2014
100,000

25

80,00020

60,00015

40,00010

20,000

5

0

2014
2015
2016
Gross Profit Margin
Gross Profit

2017

2018

2019

0

Years ended March 31 %Millions of yen

Interest-bearing Debt

200,000

160,000

120,000

80,00040,000

0

2014

2015

2016

2017

2018

2019

Years ended March 31

Millions of yen

Free Cash Flows

25,00020,00015,00010,0005,000

0-5,0002014

Millions of yen

20

2015

2016

2017

2018

2019

Years ended March 31

2015(Millions of yen)

Financial Results
Net Sales..................................................................................................
Gross Profit.............................................................................................
Gross Profit Margin (%).........................................................................
Operating Profit (Loss)...........................................................................
Ordinary Profit (Loss)............................................................................
Profit attributable to owners of parent..................................................
Segment Information
Net Sales:
Aluminum Ingot and Chemicals......................................................
Aluminum Sheet and Extrusions.....................................................
Fabricated Products and Others.......................................................
Aluminum foil, powder and paste....................................................
Total...................................................................................................
Operating Profit (Loss):
Aluminum Ingot and Chemicals......................................................
Aluminum Sheet and Extrusions.....................................................
Fabricated Products and Others.......................................................
Aluminum foil, powder and paste....................................................
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)................................................................
Total accumulated other comprehensive income (Note 3)..................
Non-controlling interests (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 Profit (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.............................................................................

¥402,829
69,00317.1
12,617
12,7305,128¥431,477
76,98717.8
19,30520,600
9,645

105,488
71,274132,261
93,806
402,829

114,339
82,823138,088
96,227431,477

2,917
2,668
7,224
2,889)(3,081)
12,617

6,069
4,230
7,704
4,183
(2,881)
19,305

226,807
150,901
5,022
49,808
181,520
129,824
105,787
4,629
10,778
198,668

248,906
153,235
4,543
50,593202,220
117,672
111,791
9,631
15,963
188,990

18,14816,435(18,998)
14,001
5,762

11,78016,406(7,119)15,869(17,581)¥9.43—203.034.00¥17.74
15.59
223.27
5.00

5.8
4.8
25.5

8.2
8.3
26.6

545,126
4,984
10,438545,126
4,495
13,335Note 1: U.S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥110.99 =U.S.$1.00. See Note 2 of the Notes to the Consolidated Financial Statements.
Note 2: Interest-bearing Debt = Long-term debt and Short-term borrowings, excluding capital lease obligations +Notes discounted + Notes endorsed
Note 3: Numbers used for the year ended March 2010 have been revised according to the current segmentcategories.

Return on Capital Employed (ROCE)
2016

2017

2018

2019

2019
(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)

12

9¥464,405
89,23719.2
26,821
24,526
15,533¥448,381
91,56420.430,22526,252
19,520¥481,439
94,03519.5
29,89329,53318,012¥500,451
97,25719.4
30,05231,084
20,560$4,508,974
876,268
19.4
270,763
280,061
185,242

109,844
103,340
149,220
102,001
464,405

101,840
98,165
154,684
93,692
448,381111,100
106,955
169,019
94,365
481,439

117,008
107,835
180,259
95,349500,451

1,054,221
971,574
1,624,101
859,077
4,508,974

9,138
3,058
10,958
6,829(3,162)
26,821

10,126
7,775
10,245
5,478(3,399)30,225

8,954
9,767
9,783
4,856
(3,467)29,893

9,616
7,152
11,681
5,114(3,511)30,052

86,63864,438105,244
46,076(31,633)
270,763

247,363
152,183
3,328
49,320186,881
120,894
124,884
5,300
14,235
182,207

246,394
151,2313,190
47,808184,277
90,722
154,600
5,053
13,971
149,835

267,059
154,002
3,187
43,052
191,729
86,249167,115
6,842
15,365
139,997

267,238
164,568
5,554
43,943
184,364
94,204
183,163
4,691
14,881
139,570

2,407,766
1,482,728
50,041395,919
1,661,087
848,761
1,650,266
42,265134,075
1,257,501

37,77016,356(19,419)
18,861(10,708)

36,48816,602(11,887)
19,908(24,432)

25,86817,126(14,948)
21,077(17,040)

34,644
17,294(22,777)
29,926(8,904)

312,136
155,816(205,217)
269,628(80,223)¥28.5625.10
239.396.00¥34.5831.46
257.828.00¥29.09—280.938.00¥33.20$0.30

9.0
12.3
28.8

9.6
13.5
35.6

10.7
10.8
37.2

10.8
11.4
39.0

545,126
4,794
12,961

619,937
4,939
13,126

619,937
5,177
12,85557,185
5,447
13,316

6

3

0

2014

2015

2016

2017

2018

2019

Years ended March 31%

Return on Equity (ROE)

15

12

9

6

3

0

2014

2015

2016

2017

2018

2019

Years ended March 31%

R&D Expenditures

6,000

—

303.37
9.00

—

2.73
0.08

5,000

4,000

3,000

2,000

1,000

49,07602014

Millions of yen

2015

2016

2017

2018

2019

Years ended March 31

21

Financial Review

Overview
During fiscal year 2018 (the year ended March 31, 2019) the risk of adownturn in the world economy became apparent, due to factors suchas a slowdown in the Chinese economy and the impact over tradeissues in the U.S. In the Japanese economy, exports and production
weakened from the start of the calendar year, due to changes in theworld economy and an uncertain outlook for the future.
The domestic aluminum industry saw overall demand foraluminum products remain at the same level as in the previous fiscal
year, as demand for use in cars and building materials increased
while demand for use in canning materials decreased. Aluminum
ingot prices trended downwards after a sharp increase at the
beginning of the year, but on a full-year basis, they remained at
almost the same level as the previous year.
Under such circumstances, the Group strived to maximize
consolidated earnings and strengthen its financial base, in
accordance with the three-year Mid-Term Management Plan thatbegan in April, 2016 and concluded with the fiscal year under review(the “MTMP 2016”; please refer to the section To Our Shareholders on
Pages 2 to 4 for details).
Net sales in the fiscal year under review increased 3.9% year on
year, with robust performances from the Alumina and Chemicals

Net Sales By Segment

Overview of Consolidated Business Performance(Millions of yen)
Changes in
Comparison
Previous
Fiscal year
fiscal year (Decrease in brackets)
under review
Changes
The year ended The year ended
March 31, 2019 March 31, 2018 [Percent changes]

Net sales

500,451

481,439

Operating profit

30,05229,893159 [0.5%]

Ordinary profit

31,08429,533

1,551 [5.3%]

Profit attributable toowners of parent

20,56018,0122,548 [14.1%]

Net income per share (Yen)

33.20

29.09

4.11 [14.1%]

segment, Aluminum Ingot segment and Panel System segment,
despite a decrease in sales from the Aluminum Sheet segment andSolar segment, among others. Operating profit increased 0.5% year on
year, due to an increase in selling, general and administrative
expenses, while ordinary profit increased 5.3% year on year, due to anincrease in non-operating income and a decrease in non-operating
expenses. Profit attributable to owners of parent increased 14.1% year
on year, due to an increase in special gains and a decrease in special
losses, despite an increase in corporate, inhabitant and business taxes.
Earnings and Expenses
NLM Holdings’ consolidated net sales for the fiscal year under review

Total Net Assets

Equity Ratio

500

250

40

400

200

32

300

150

24

200

100

16

100

50

8

0

2014

Billions of yen

2015

2016

2017

2018

2019

Years ended March 31

0

2014

Billions of yen

2015

19,012 [3.9%]

2016

2017

2018

0

2019

As of March 31

%

2014

2015

2016

2017

2018

2019

As of March 31

Aluminum Ingot and Chemicals
Aluminum Sheet and Extrusions
Fabricated Products and Others
Aluminum Foil, Powder and Paste

Note: Numbers used for the year ended March 2010 have been revised according to the current segment categories. Numbers used for the year ended March 2010 do notinclude numbers form the Building Materials segment.

22

increased 3.9% year on year to ¥500.5 billion ($4,509 million). For
sales and other aspects of financial performance by business segment,
please see the Review of Operations on Pages 16 to 19.
The cost of sales increased 4.1% year on year to ¥403.2 billion($3,633 million). Selling, general and administrative expenses were
¥67.2 billion ($606 million). As a result, operating profit increased
0.5% year on year to ¥30.1 billion ($271 million).
Non-operating income increased 16.0% year on year to ¥4.9 billion($44 million). Equity in earnings of affiliates decreased 31.9% year on
year to ¥0.7 billion ($6 million) and dividend income decreased 56.9%
year on year to ¥0.3 billion ($3 million), but other non-operating
income increased 87.7% year on year to ¥2.4 billion ($21.2 million).
Non-operating expenses decreased 15.8% year on year to ¥3.8
billion ($35 million). As a result, ordinary profit rose 5.3% year on
year to ¥31.1 billion ($280 million).
Special gains included a gain on step acquisitions of ¥1.4 billion($12 million), and special losses of ¥1.3 billion ($12 million) wererecorded. Special losses included a loss on valuation of investment
securities of ¥0.4 billion ($3 million) and a loss on impairment of
fixed assets of ¥1.0 billion ($9 million).
As a result, profit before income taxes during the fiscal year underreview was ¥31.1 billion ($280 million). Corporate, inhabitant andbusiness taxes amounted to ¥7.3 billion ($66 million) and deferredincome taxes during the fiscal year under review were ¥1.8 billion ($16
million). Profit was ¥22.0 billion ($198 million).
As a result of the above, profit attributable to owners of parent in
the fiscal year under review increased 14.1% year on year to ¥20.6
billion ($185 million). The average number of shares outstanding
decreased from 619,227 thousand in the previous fiscal year to 619,221
thousand. Accordingly, net income per share increased from ¥29.09 in
the previous year to ¥33.20 ($0.30). The annual cash dividend pershare increased by ¥1.0 from the previous year to ¥9.0 ($0.08), by
resolution at the General Meeting of Shareholders held on June 25,
2019.
Overview of Consolidated Balance Sheets(Millions of yen)March 31, 2019 March 31, 2018

Changes in
Comparison

Total assets

481,303

467,199

Total liabilities

278,568

277,877691

Net assets

202,735

189,322

13,413

39.0

37.2

1.8

Equity ratio (%)

14,104

Assets, Liabilities and Shareholders’ Equity
Total assets as of March 31, 2019 increased ¥14.1 billion year on yearto ¥481.3 billion ($4,336 million). Total liabilities increased ¥0.7
billion year on year to ¥278.6 billion ($2,510 million). This was
mainly due to an increase in income taxes payable. Interest-bearing
debt decreased ¥0.4 billion year on year to ¥139.6 billion.
Total net assets increased ¥13.4 billion year on year to ¥202.8
billion ($1,827 million), thanks primarily to an increase in retained
earnings due to the recording of profit in the fiscal year under review.
Net assets per share increased ¥22.44 year on year to ¥303.37 ($2.73),
while the equity ratio rose 1.8 percentage points year on year to
39.0%.
Cash Flows
Cash and cash equivalents on a consolidated basis as of March 31, 2019
increased ¥2.8 billion year on year to ¥33.3 billion ($300 million).
Net cash provided by operating activities totaled ¥34.6 billion ($312
million). Net cash used in investing activities was ¥22.8 billion ($205
million). The main outflows were payments for purchases of fixed
assets. Net cash used in financing activities totaled ¥8.9 billion ($80
million). The main inflows were ¥20.1 billion ($182 million) inproceeds from long-term debt, and the main outflows were ¥19.9 billion($180 million) in repayments of long-term debt.
Outlook for Fiscal 2019
The global economic outlook will likely become increasingly
uncertain due to risks such as the development of trade issues withthe slowdown of the Chinese economy, and the impact of Brexit. The
outlook for the Japanese economy permits no optimism in view ofconcerns over a possible dip in consumption in line with the increaseof the consumption tax rate as well as the slowing of the world
economy.
Under such circumstances, the Group formulated a new Mid-termManagement Plan that covers a period from April 2019 to March
2022. (For details, please refer to the Special Feature on Pages 5-7.)
The goal is to maximize consolidated net sales and profits throughcreation of new products and new businesses, investment of resources
for growth, and strengthening of the management foundation.
Our plans for the year ending March 31, 2020 are net sales of¥510.0 billion, ordinary profit of ¥31.0 billion, and profit attributableto owners of parent of ¥20.0 billion. We plan for net income per shareto total ¥32.30 and a cash dividend per share of ¥9.0.

23

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

2018

2019

(Millions of yen)(Thousands of
U.S. dollars) (Note 3)

Current assets:
Cash and deposits (Notes 4 and 7) Notes and accounts receivable – trade (Note 7) Electronically recorded monetary claims – operating (Note 7) Finished products Work-in-progress, including costs related to construction-type contracts 
Raw materials and supplies 
Other current assets Allowance for doubtful accounts 
Total current assets ¥30,722 ¥33,417
136,021
123,039
18,76429,642
28,27630,453
17,675
19,105
20,69022,231
11,612
9,848(1,089)(497)
262,671
267,238$301,081
1,108,559
267,069
274,376
172,133
200,297
88,729(4,478)2,407,766

Property, plant and equipment (Note 6):
Land 
Buildings and structures 
Machinery and equipment 
Tools, furniture and fixtures Construction-in-progress 
Accumulated depreciation 
Total property, plant and equipment 54,65954,663
138,620
140,766
284,029
290,629
33,21934,317
7,242
15,023(363,767) (370,830)
154,002
164,568

492,504
1,268,276
2,618,515
309,190
135,355(3,341,112)
1,482,728

AssetsIntangible assets:
Goodwill (Note 18) 
Other intangible assets 
Total intangible assets 

—
3,187
3,187

1,999
3,555
5,554

18,011
32,03050,041

Investments and other assets:
Investment securities (Notes 5, 6 and 7) Deferred tax assets (Note 10) 
Other assets Allowance for doubtful accounts 
Total investments and other assets 32,276
7,788
7,530
(255)
47,33929,623
6,618
7,924
(222)
43,943

266,898
59,627
71,394(2,000)395,919¥467,199 ¥481,303$4,336,454

Total assets 

24March 31,
2019

2018

March 31,2019

(Millions of yen)

2019
(Thousands of
U.S. dollars) (Note 3)

Liabilities and net assets
Current liabilities:
Short-term borrowings (Notes 6 and 7) Current portion of long-term debt (Notes 6 and 7) Notes and accounts payable – trade (Note 7) 
Income taxes payable 
Other current liabilities 
Total current liabilities ¥56,148
20,18578,6302,110
34,656
191,729¥55,411
15,05876,244
3,422
34,229184,364$499,243
135,670
686,945
30,832
308,397
1,661,087

Long-term liabilities:
Long-term debt (Notes 6 and 7) Liabilities for retirement benefits (Note 9) 
Other long-term liabilities (Notes 6, 7 and 10) 
Total long-term liabilities 
Total liabilities 65,161
19,775
1,212
86,148277,877

73,273
19,741
1,190
94,204
278,568

660,177
177,863
10,721
848,7612,509,848

46,525
19,064
101,593(67)
167,115

46,525
19,500117,206(68)
183,163

419,182
175,692
1,056,005(613)
1,650,266

4,181
(144)
145
3,111
(451)
6,842
15,365
189,322

3,322
(9)
145
2,434
(1,201)
4,691
14,881
202,735

29,931(81)
1,306
21,930(10,821)42,265134,075
1,826,606¥467,199¥481,303$4,336,454

Net assets:
Shareholders’ equity:
Common stock:
Authorized: 2,000,000,000 shares Issued:619,937,500 shares 
Additional paid-in capital Retained earnings Treasury stock, at cost (714,480 shares in 2018 and 720,629 shares in 2019) 
Total shareholders’ equity Accumulated other comprehensive income:Net unrealized gains (losses) on securities (Note 5) Net unrealized gains (losses) on hedges (Note 7 and 13) Land revaluation surplus (Note 12) 
Foreign currency translation adjustments 
Remeasurements of defined benefits plans (Note 9) 
Total accumulated other comprehensive income Non-controlling interests 
Total net assets Contingent liabilities (Note 15) 
Total liabilities and net assets 
The accompanying notes are an integral part of these financial statements.

25

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

Years ended March 31,
2019

2018

(Thousands of
U.S. dollars) (Note 3)(Millions of yen)

Net sales 
Cost of sales (Note 14) 
Gross profit 
Selling, general and administrative expenses (Note 14) 
Operating profit 
Non-operating income:Interest income Dividend income Equity in earnings of affiliates 
Rental income Technical support fee 
Other Total non-operating profit 
Non-operating expenses:
Interest expense 
Loss on disposal of fixed assets 
Rental expense 
Other Total non-operating expenses 
Ordinary profit Special gains:
Gain on step acquisitions 
Gain on bargain purchase 
Total special gains Special losses:
Loss on valuation of investment securities (Note 5) Settlement package 
Loss on impairment of fixed assets (Note 16) 
Loss on step acquisitions (Note 18) 
Total special losses 
Profit before income taxes 
Income taxes (Note 10):
Current Deferred 
Net profit Profit attributable to non-controlling interests Profit attributable to owners of parent Per share of common stock (Note 17):
Net assets Net profit Cash dividends (Note 11) 
The accompanying notes are an integral part of these financial statements.

26

2019

¥481,439
387,404
94,03564,14229,893¥500,451
403,194
97,257
67,20530,052$4,508,974
3,632,706
876,268
605,505
270,763

90
670
998
758
432
1,254
4,202

81
289
680
804
666
2,354
4,874

730
2,604
6,127
7,244
6,001
21,20843,914

1,363
564
599
2,036
4,562
29,533

1,301
575
758
1,208
3,842
31,084

11,722
5,181
6,829
10,884
34,616
280,061

—
300
300

1,371
—
1,371

12,353—
12,353

—
2,029
933
117
3,079
26,754

386
—
957
—
1,343
31,112

3,478
—
8,622
—
12,100280,314

4,932
1,819
6,751
20,003
1,991¥18,012

7,342
1,764
9,106
22,006
1,446¥20,560

66,15015,89382,043
198,270
13,028$185,242(U.S. dollars)(Note 3)(Yen)

¥280.93
29.09
8.00

¥303.37
33.20
9.00

$2.730.30
0.08

Consolidated Statements of Comprehensive Income
Nippon Light Metal Holdings Company, Ltd. and consolidated subsidiaries

Years ended March 31,
2019

2018

2019
(Thousands of
U.S. dollars) (Note 3)(Millions of yen)

¥20,003¥22,006$198,270

Net unrealized gains (losses) on securities 

(14)

(890)

(8,019)Net unrealized gains (losses) on hedges 

(218)

135

1,216

Foreign currency translation adjustments 

900

(413)

(3,721)Remeasurements of defined benefit plans 

782

(766)

(6,902)Equity of other comprehensive income (losses) of affiliates 

459

(397)

(3,576)

Total other comprehensive income (losses) (Note 8) 

1,909

(2,331)(21,002)¥21,912¥19,675$177,268¥19,801¥18,409$165,862

2,111

1,266

11,406¥21,912¥19,675$177,268

Net profit 
Other comprehensive income (losses)

Comprehensive income Attributable to:owners of parent 
non-controlling interests 

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

27

Consolidated Statements Of Changes In Net Assets
Nippon Light Metal Holdings Company, Ltd. and consolidated subsidiaries

2018
Shareholders’ equity
Commonstock

Additional
paid-in
capitalAccumulated other comprehensive income
Net
Foreign
Net
Nonunrealized unrealized Revaluation currency Remeasurements
controllingtranslationof defined
gains (losses) gains (losses) surplus
interests(Note 12) adjustments benefits planson securities on hedges

Treasurystock,
at costRetainedearnings

Total
net assets(Millions of yen)

Balance at April 1, 2017 
Cash dividends (Note 11) 
Profit attributable to owners of parent 
Purchase of treasury stock 
Change of scope of consolidation 
Increase by merger Capital increase of consolidated subsidiaries 
Change in ownership interest of parent due totransactions with non-controlling interests 
Net unrealized gains (losses) on securities 
Net unrealized gains (losses) on hedges 
Foreign currency translation adjustments 
Remeasurements of defined benefits plans 
Net increase in non-controlling interests 
Balance at March 31, 2018 ¥46,525¥19,064 ¥89,076(5,575)18,012¥(65)¥4,229

¥74

¥145

¥1,875¥(1,270) ¥13,971

(2)
80

(48)
(218)
1,236
819
¥46,525¥19,064 ¥101,593¥(67)¥4,181¥(144)¥145¥3,1111,394¥(451) ¥15,365¥173,624(5,575)18,012
(2)
80
—
—
—
(48)
(218)
1,236
819
1,394
¥189,322

2019
Shareholders’ equity
Commonstock

Additional
paid-in
capitalAccumulated other comprehensive income
Net
Foreign
Net
Nonunrealized unrealized Revaluation currency Remeasurements
controllingtranslationof defined
gains (losses) gains (losses) surplus
interests(Note 12) adjustments benefits planson securities on hedges

Treasurystock,
at costRetainedearnings

Total
net assets(Millions of yen)

Balance at April 1, 2018 
Cash dividends (Note 11) 
Profit attributable to owners of parent 
Purchase of treasury stock 
Change of scope of consolidation 
Increase by merger Capital increase of consolidated subsidiaries 
Change in ownership interest of parent due totransactions with non-controlling interests 
Net unrealized gains (losses) on securities 
Net unrealized gains (losses) on hedges 
Foreign currency translation adjustments 
Remeasurements of defined benefits plans 
Net increase in non-controlling interests 
Balance at March 31, 2019 ¥46,525¥19,064 ¥101,593(4,955)
20,560¥(67)¥4,181¥(144)¥145¥3,111¥(451) ¥15,365¥189,322(4,955)
20,560(1)—
8
212(1,257)(1,033)
(859)
135
(677)
(750)
773
¥202,735

(1)
8
212
224
(859)
135
(677)
(750)
¥46,525¥19,500 ¥117,206¥(68)¥3,322

¥(9)

¥145

¥2,434773¥(1,201) ¥14,881

2019
Shareholders’ equity
Commonstock

Additional
paid-in
capitalAccumulated other comprehensive income

Retainedearnings

Net
Foreign
Net
Nonunrealized unrealized Revaluation currency Remeasurements
controllingtranslationof defined
gains (losses) gains (losses) surplus
interests(Note 12) adjustments benefits planson securities on hedges

Treasurystock,
at costTotal
net assets(Millions of yen)

Balance at April 1, 2018 
Cash dividends (Note 11) 
Profit attributable to owners of parent 
Purchase of treasury stock 
Change of scope of consolidation 
Increase by merger Capital increase of consolidated subsidiaries 
Change in ownership interest of parent due totransactions with non-controlling interests 
Net unrealized gains (losses) on securities 
Net unrealized gains (losses) on hedges 
Foreign currency translation adjustments 
Remeasurements of defined benefits plans 
Net increase in non-controlling interests 
Balance at March 31, 2019 $419,182$171,763 $915,335(44,644)
185,242$37,670$(1,297)$1,306$28,030

(9)
72
1,910
2,019
1,216
(6,100)$419,182$175,692 $1,056,005$(4,063) $138,436 $1,705,758(44,644)
185,242
(9)
—
72
1,910
(11,326)(7,739)The accompanying notes are an integral part of these financial statements.

28$(604)$(613)$29,931$(81)$1,306$21,930(9,307)(7,739)
1,216(6,100)(6,758)(6,758)6,965
6,965$(10,821) $134,075 $1,826,606

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

2018

Years ended March 31,
2019(Millions of yen)

Cash flows from operating activities
Profit before income taxes 
Depreciation and amortization 
Amortization of goodwill 
Loss (gain) on step acquisitions 
Loss on impairment of fixed assets 
Loss (gain) on valuation of investment securities 
Gain on bargain purchase 
Settlement Package 
Decrease in allowance for doubtful accounts Increase (decrease) in net defined benefit liability Interest and dividend income Interest expense 
Equity in earnings of affiliates 
Decrease (increase) in notes and accounts receivable – trade 
Increase in inventories 
Increase (decrease) in notes and accounts payable – trade 
Other Subtotal Interest and dividends received Interest paid 
Settlement package paid 
Income taxes paid 
Net cash provided by operating activities 
Cash flows from investing activities
Payments for purchase of property, plant and equipment Proceeds from sales of property, plant and equipment 
Payments for purchase of intangible assets Proceeds from purchase of shares of subsidiaries resulting in change inscope of consolidation (Note 4) Proceeds from sales of investment securities 
Other Net cash used in investing activities 
Cash flows from financing activities
Net decrease in short-term borrowings Proceeds from long-term debt 
Repayments of long-term debt Proceeds from issuance of bonds 
Redemption of bonds 
Cash dividends paid 
Dividends paid to non-controlling interests 
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation 
Other Net cash used in financing activities 
Effect of exchange rate changes on cash and cash equivalents 
Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year 
Increase in cash and cash equivalents from newly consolidated subsidiary 
Cash and cash equivalents at end of the year (Note 4) 2019(Thousands of
U.S. dollars)(Note 3)

¥ 26,754 ¥ 31,112
17,126
17,294—222
117(1,371)
933
957
—
386
(300)
—
2,029
—
(417)
(625)
413
(1,110)
(760)
(370)
1,363
1,301
(998)
(680)
(18,327)
3,812(7,075)(4,186)
10,594(3,721)(24)(1,131)
31,42841,8901,332
658(1,349)(1,345)—(2,029)(5,543)(4,530)25,86834,644$ 280,314
155,8162,000(12,352)
8,622
3,478
—
—
(5,631)(10,001)(3,334)
11,722(6,127)34,345(37,715)(33,526)(10,190)
377,421
5,928(12,118)(18,281)(40,814)
312,136(19,395)
816(933)(22,262)251(1,373)(200,577)
2,261(12,370)

—
4,096
468
(14,948)

1,201
—
(594)
(22,777)

10,821—(5,352)(205,217)(4,176)
15,294(21,174)
665(665)(5,578)
(687)

(852)
20,145(19,926)——(4,971)(691)(7,676)
181,503(179,530)——(44,788)(6,226)(1,857)
—
(719)
(752)
(17,040)(8,904)293(135)(5,827)2,828
36,28630,51758—¥ 30,517 ¥ 33,345(16,731)(6,775)(80,223)(1,216)25,480274,952—$ 300,432

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

29

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

1. SIGNIFICANT ACCOUNTING POLICIES(a) Basis of presentation
The accompanying consolidated financial statements of Nippon Light Metal Holdings Company, Ltd. (the “Company”) and its consolidated
subsidiaries are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects, from theapplication and disclosure 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 ofpresenting 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.
As a result, the consolidated financial statements for the year ended March 31, 2019 include the accounts of the Company and its 78
significant subsidiaries, and its 17 affiliates are accounted for by the equity method (77 and 16, respectively, in the previous year).
The balance sheet date of certain consolidated subsidiaries is December 31. In principle, the financial statements of such subsidiaries weretentatively prepared to be consolidated in accordance with the fiscal year (ended March 31) of the Company, while those of some companies whose
closing date is December 31 are used upon consolidation, with the necessary adjustments made to those financial statements to reflect any
significant inter-group transactions made between December 31 and March 31.
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 exchange gains and losses are included in income 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 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 allocated to 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 which are exposed to a minor risk of fluctuation in value.
(e) Inventories
Inventories are principally stated at cost, determined by the moving average method. In addition, the balance sheet amount is carried at the lowerof cost or market to reflect descent of profitability.
(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 fair30

value with net unrealized gains or losses being included in net assets, net of 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 moving average method and are included inincome 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.
(h) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation is computed principally using the straight-line method over the estimated useful
lives of the respective assets, ranging from 2 years to 60 years for buildings and structures, and from 2 years to 22 years for machinery andequipment.
(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) Retirement benefits
1) The retirement benefit obligation for employees is attributed to each period by the benefit formula method over the estimated years ofservice of the eligible employees.
2) Prior service cost is amortized as incurred mainly by the straight-line method over the period of 15 years, which is shorter than the averageremaining years of service of the then employees. 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.
(k) Leased assets
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 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.
(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 profit 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 and others in the market. Derivatives designated as hedging instruments are principally forward foreignexchange contracts, interest rate swap contracts, interest rate and currency swap contracts, and aluminum ingot and others forward contracts. The
underlying hedged items are trade accounts receivable and payable, long-term bank loans, and sales or purchases of aluminum ingot and others.

31Notes to Consolidated Financial Statements

Gains and losses arising from changes in fair value of derivatives designated as hedging instruments are deferred and included in net profit in
the same period in which the corresponding gains and losses on the underlying hedged items or transactions are recognized. The Company and its
consolidated subsidiaries use interest rate swaps, and interest rate and currency swaps to hedge their interest rate (and foreign exchange rate) risk
exposure. The related interest differentials paid or received under the interest rate swap agreements are recognized in interest expense over the termof the agreements.
The Company and its consolidated subsidiaries assess 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.
(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 a
general meeting of shareholders.
The Company’s retained earnings consist of unappropriated retained earnings and a legal reserve as required by the Companies Act of Japan.
The Companies Act provides that an amount equal to 10% of distributions from unappropriated retained earnings paid by the Company and its
domestic subsidiaries be appropriated to the legal reserve. Such appropriations are no longer required when the total amount of statutory reserve(additional paid-in capital (other than the capital reserve) and the legal reserve) equals 25% of their respective stated capital.
(p) Net profit per share
Basic net profit per share of common stock, presented in the accompanying consolidated statements of income, is computed based on the weighted
average number of shares outstanding during each year.
Diluted net profit per share reflects the potential dilution that could occur if securities were converted into common stock. Diluted net profit
per share of common stock assumes full conversion of the outstanding convertible bonds at the time of issuance with an applicable adjustment for
the related interest expense on a net of tax basis.
(q) Reclassification
Certain reclassifications of previously reported amounts have been made to conform them to the current year’s presentations.
(r) Accounting standards issued but not yet effective
Accounting Standard and Implementation Guidance on Revenue Recognition
On March 30, 2018, the Accounting Standards Board of Japan (“ASBJ”) issued “Accounting Standard for Revenue Recognition” (ASBJ Statement
No. 29) and “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30).
(1) Overview
This is a comprehensive accounting standard for revenue recognition. Specifically, the accounting standard establishes the following fivestep model that will apply to revenue from contracts with customers:
1. Identify the contract(s) with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognize revenue when (or as) the entity satisfies a performance obligation(2) Scheduled date of adoption
The Company expects to adopt the accounting standard and implementation guidance from the beginning of the fiscal year ending March
31, 2022.
(3) Impact of the adoption of accounting standard and implementation guidance
The Company is currently evaluating the effect of the adoption of this accounting standard and implementation guidance on its
consolidated financial statements.

32

2. ACCOUNTING CHANGES(a) Change in accounting policies
Not applicable.
(b) Change in presentation
Partial Amendments to Accounting Standard for Tax Effect Accounting
The Company and its consolidated subsidiaries have adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ
Statement 28, February 16, 2018) (hereinafter, the “Partial Amendments”) from the beginning of the fiscal year ended March 31, 2019. As such,deferred tax assets and deferred tax liabilities are included within investments and other assets and long term liabilities, respectively, and related
income tax disclosures have been expanded.
As a result, ¥4,388 million of deferred tax assets in current assets and ¥101 million of other long-term liabilities in long-term liabilities
previously presented in consolidated balance sheet as of March 31, 2018 have been reclassified and included within ¥7,788 million of deferred tax
assets in investments and other assets.
Also, “Note 10. Income Taxes” in the notes to the consolidated financial statements has been expanded in accordance with Note 8 and Note 9of Interpretive Notes to Accounting Standard for Tax Effect Accounting. However, comparative information for the year ended March 31, 2018 has
not been disclosed in Note 10 in accordance with the transitional provisions set forth in Article 7 of the Partial Amendments.
3. U.S. DOLLAR AMOUNTS
The rate of ¥110.99 = U.S.$1, the approximate exchange rate prevailing at March 31, 2019, has been used for the purpose of presenting the U.S.
dollar amounts in the accompanying consolidated financial statements. These amounts are presented solely for the convenience of the readers.
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.
4. 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, 2018 and 2019 is summarized as follows:
2018

2019

(Millions of yen)

Cash and deposits Time deposits with maturities in excess of 3 months 
Cash and cash equivalents ¥30,722(205)¥30,517¥33,417(72)¥33,345

2019(Thousands of
U.S. dollars)$301,081(649)$300,432

The following is the summary of assets acquired and liabilities assumed through the acquisition of shares of Sumikei-Nikkei Engineering Co., Ltd.
for the year ended March 31, 2019, related acquisition costs and net proceeds.
2019

Current assets 
Fixed assets 
Goodwill 
Current liabilities Long-term liabilities 
Non-controlling interests Gain on step acquisitions 
Carrying amount accounted for by the equity method immediately before gaining controls 
Acquisition cost of shares 
Cash and cash equivalents 
Net: Proceeds from purchase of shares of subsidiaries (Millions of yen)

2019
(Thousands of
U.S. dollars)¥7,894
319
2,221(3,942)(13)(809)(1,371)(2,129)2,170
3,371¥1,201$71,124
2,874
20,011(35,517)(117)(7,289)(12,353)(19,182)
19,55130,372$10,821
33

Notes to Consolidated Financial Statements

5. INVESTMENT SECURITIES(a) Available-for-sale securities with available market quotations
The acquisition cost, carrying amount, and gross unrealized gains and losses of available-for-sale securities with available market quotations at
March 31, 2018 and 2019 were as follows:
2018

Equity securities
Cost 
Unrealized gains 
Unrealized losses 
Carrying amount 

2019

2019
(Thousands of
U.S. dollars)(Millions of yen)¥3,824
5,799(4)¥9,619¥ 3,873
4,674(40)¥ 8,507$ 34,895
42,112(360)$ 76,647(b) Sales of available-for-sale securities
The proceeds and realized gains and losses on sales of available-for-sale securities for the years ended March 31, 2018 and 2019 were as follows:
2018

2019

2019
(Thousands of
U.S. dollars)(Millions of yen)

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

¥26
14
—

¥

0
—
—

$0
—
—

(c) Impairment of securities
Impairment of other securities for the years ended March 31, 2019 (none for 2018) was ¥386 million ($3,478 thousand).
(d) Investments in non-consolidated subsidiaries and affiliates
securities in the consolidated balance sheets, as of March 31, 2018 and 2019 are as follows:
2018

2019

(Millions of yen)

Investments in non-consolidated subsidiaries and affiliates (Investments in jointly controlled entities included in the above) ¥16,458(4,883)¥14,883(2,597)

2019(Thousands of
U.S. dollars)$134,093(23,399)

6. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings at March 31, 2019 bore interests at annual rates ranging from 0.21% to 8.70% and mainly consist of bank loans and shortterm notes maturing at various dates within one year.
Long-term debt at March 31, 2018 and 2019 comprised the following:
2018

2019

(Millions of yen)

Loans, principally from banks and insurance companies due from 2019 to 2029 withinterest rates ranging from 0.20% to 4.75%:
Secured 
Unsecured 
Unsecured 1.65% bonds due June 1, 2027, redeemable before due date Capital lease obligations due from 2018 to 2034 with interest rates ranging from 1.15%
to 7.20% Less: portion due within one year 
Total long-term debt 34

2019(Thousands of
U.S. dollars)¥1,377
81,835637¥826
82,667666$7,442
744,815
6,001

1,497
85,346(20,185)¥65,161

4,172
88,331(15,058)¥73,273

37,589795,847(135,670)$660,177

A summary of assets pledged as collateral for short-term borrowings and long-term debt at March 31, 2018 and 2019 is as follows:
2018

2019

(Millions of yen)

Property, plant and equipment 
Investment securities ¥1,114
9

¥503
—

2019
(Thousands of
U.S. dollars)$4,532—

The maturities of long-term debt outstanding at March 31, 2019 are summarized as follows:
Years ending March 31,
2020 
2021 
2022 
2023 
2024 
Thereafter (Millions of yen)(Thousands of
U.S. dollars)¥15,058
9,811
5,914
9,010
7,776
40,762¥88,331$135,670
88,39553,284
81,17870,060367,259$795,846

7. FINANCIAL INSTRUMENTS(a) Overview
1. Policy for financial instruments
The Company and its consolidated subsidiaries (the “Group”) invest temporary cash surpluses primarily on short-term deposits, and strive todiversify financing methods by raising funds through bank borrowings and corporate bonds. The Group utilizes various derivative financial
instruments such as interest rate swaps, forward foreign exchange contracts, forward trading in aluminum ingots and currency swap contracts forthe purpose of reducing risk, and does not enter into derivative transactions for speculative or trading purposes.
2. Types of financial instruments and related risk, and risk management for financial instruments
Notes and accounts receivable – trade and electronically recorded monetary claims –operating are exposed to credit risk in relation to customers.
The Group manages the risks by monitoring the due dates and outstanding balances by individual customers. Accounts receivable – tradedenominated in foreign currencies are exposed to risk of exchange rate fluctuations and are hedged by utilizing forward foreign exchange
contracts. Stocks of investment securities, which are exposed to market fluctuations, are mainly those of companies with which the Group hasbusiness relationships. The Group periodically reviews the fair values of such stocks and the financial position of the issuers.
Notes and accounts payable – trade have payment due dates approximately within one year.
Short-term borrowings are used mainly for operating activities, and long-term borrowings are used principally for the purpose of making
capital investments. Variable rate borrowings are exposed to risk of interest rate fluctuation and some of those denominated in foreign currencies
are exposed to risk of exchange rate fluctuations. However, in order to reduce such risks, the Group utilizes interest rate swap and interest rate andcurrency swap transactions as a hedging instrument for each individual contract for some of those long-term borrowings. Assessment of theeffectiveness of hedging activities is omitted, as the requirements for special treatment of interest rate swaps are met.
The execution and management of derivative transactions are performed based on the control procedure designated in management policy. In
addition, to reduce credit risk, counterparties of derivative instruments are restricted to only highly rated financial institutions and major trading
companies.
For notes and accounts payable – trade and borrowings, the Group prepares its cash flow plans to manage liquidity risk (the risk that theGroup may not be able to meet its obligations on scheduled due dates).
3. Supplementary explanation of the estimated fair value of financial instruments
The notional amounts of derivatives in “(b) Estimated fair value of financial instruments and related information,” do not necessarily indicate theactual market risk involved in the derivative transactions.

35

Notes to Consolidated Financial Statements(b) Estimated fair value of financial instruments and related information
The carrying value of financial instruments in the consolidated balance sheets, estimated fair value and the difference between them as of March
31, 2018 and 2019 are as follows:
2018
Carrying Value *1

Estimated Fair Value *1

Difference(Millions of yen)¥30,722¥30,722¥—(2) Notes and accounts receivable – trade 

136,021

136,021—(3) Electronically recorded monetary claims – operating 

18,764

18,764—

Stocks of subsidiaries and affiliates 

4,014

1,763

(2,251)Other securities 

9,619

9,619

—

(5) Notes and accounts payable – trade (78,630)(78,630)—(6) Short-term borrowings (56,148)(56,148)

—

(637)

(637)

—

(83,212)(83,991)(779)(1) Cash and deposits (4) Investment securities(7) Bonds (8) Long-term borrowings *2(9) Derivative transactions 
for which hedge accounting has not been applied 

24

24

—

for which hedge accounting has been applied 

(181)

(181)

—

*1 Liabilities are shown in parenthesis.
*2 The current portion of long-term borrowings is included in long-term borrowings.
2019
Carrying Value *1

Estimated Fair Value *1

Difference(Millions of yen)¥33,417¥33,417¥—(2) Notes and accounts receivable – trade 

123,039

123,039—(3) Electronically recorded monetary claims – operating 

29,642

29,642—

Stocks of subsidiaries and affiliates 

4,097

1,969

(2,128)Other securities 

8,507

8,507

—

(5) Notes and accounts payable – trade (76,244)(76,244)—(6) Short-term borrowings (55,411)(55,411)

—

(666)

(666)

—

(83,493)(84,157)(664)

for which hedge accounting has not been applied 

(1)

(1)

—

for which hedge accounting has been applied 

0

0

—

(1) Cash and deposits (4) Investment securities(7) Bonds (8) Long-term borrowings *2(9) Derivative transactions 

36

2019
Carrying Value *1

Estimated Fair Value *1

Difference(Thousands of U.S. dollars)$301,081$301,081$—(2) Notes and accounts receivable – trade 

1,108,559

1,108,559—(3) Electronically recorded monetary claims – operating 

267,069

267,069—

36,913

17,740(19,173)(1) Cash and deposits (4) Investment securities
Stocks of subsidiaries and affiliates 

76,64776,647—(5) Notes and accounts payable – trade (686,945)(686,945)—(6) Short-term borrowings (499,243)(499,243)—(6,001)(6,001)—(752,257)(758,239)(5,982)for which hedge accounting has not been applied 

(9)

(9)

—

for which hedge accounting has been applied 

0

0

—

Other securities (7) Bonds (8) Long-term borrowings *2(9) Derivative transactions *1 Liabilities are shown in parenthesis.
*2 The current portion of long-term borrowings is included in long-term borrowings.
Notes
1. Method for determining the estimated fair value of financial instruments and other matters related to securities and derivative transactions(1) Cash and deposits, (2) Notes and accounts receivable – trade and (3) Electronically recorded monetary claims – operating
Since these items are settled in a short period of time, their carrying value approximates fair value.
(4) Investment securities
The fair value of stocks is based on quoted market prices. For information on securities classified by holding purpose, refer to Note 5“Investment Securities.”(5) Notes and accounts payable – trade and (6) Short-term borrowings
Since these items are settled in a short period of time, their carrying value approximates fair value.
(7) Bonds
The fair value of bonds is based on the present value of the sum of principal and interest discounted by an interest rate determined basedon the remaining period and current credit risk of each bond.
(8) Long-term borrowings
The fair value of long-term borrowings is based on the present value of the sum of principal and interest discounted by an interest rate
which is expected to be required upon entering into similar new borrowings. Interest rate swaps subject to special treatment, and interest
rate and currency swaps subject to integral accounting method are used for some long-term floating rate borrowings. Principal andinterest in which these swaps are embedded, are discounted using a current interest rate which is expected to be required upon entering
into similar new borrowings.
(9) Derivatives
Refer to “Note 13. Derivatives.”
2. Unlisted stocks of ¥18,643 million and ¥17,019 million ($153,338 thousand) as of March 31, 2018 and 2019 are not included in “(4)Investment securities” because no quoted market prices are available and it is extremely difficult to measure the fair value.

37

Notes to Consolidated Financial Statements

3. The redemption schedule for receivables and marketable securities with maturities at March 31, 2018 and 2019 is as follows:2018
Due within
one year

Due after one year but
within five years

Due after five years but
within ten years

Due after
ten years¥30,661
136,021
18,764

¥—
—

¥—
—

¥—
—

2
¥185,448

4
¥4

—
¥—

—
¥—

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)

Cash and deposits Notes and accounts receivable – trade Electronically recorded monetary claims – operating 
Investment securities
Held-to-maturity securities
Government and municipal bonds 

2019(Millions of yen)

Cash and deposits Notes and accounts receivable – trade Electronically recorded monetary claims – operating 
Investment securities
Held-to-maturity securities
Government and municipal bonds ¥33,356
123,039
29,642

¥—
—

¥—
—

¥—
—

2
¥186,039

3
¥3

—
¥—

—
¥—

Due within
one year

Due after one year but
within five years

Due after five years but
within ten years

Due after
ten years

2019(Thousands of U.S. dollars)

Cash and deposits Notes and accounts receivable – trade Electronically recorded monetary claims – operating 
Investment securities
Held-to-maturity securities
Government and municipal bonds $300,532
1,108,559
267,069

$—
—

$—
—

$—
—

18
$1,676,178

27
$27

—
$—

—
$—

4. The redemption schedule for bonds and long-term borrowings at March 31, 2018 and 2019 is as follows:2018
Due within
one year

Due after one year but
within five years

Due after
five years(Millions of yen)

Bonds Long-term borrowings ¥—19,363¥19,363¥—29,384¥29,384

Due within
one year

Due after one year but
within five years¥637
34,199¥34,836

2019
Due after
five years(Millions of yen)

Bonds Long-term borrowings 38¥—14,496¥14,496¥—30,977¥30,977¥666
38,020¥38,686

2019
Due within
one year

Due after one year but
within five years

Due after
five years(Thousands of U.S. dollars)$—
130,606$130,606

Bonds Long-term borrowings $— $6,001
279,097
342,553$279,097 $348,554

5. The fair value of derivatives at March 31, 2018 and 2019 is as follows:(1) Derivative transactions for which hedge accounting has not been applied
		 Currency-related transactions
2018
Notional amount

Maturity over 1 year

Fair value (*)(Millions of yen)

Currency swap contracts
U.S. dollars payment / Japanese yen receipt 
		

¥452

¥452

Notional amount

Maturity over 1 year

¥24

Currency-related transactions
2019
Fair value (*)(Millions of yen)

Currency swap contracts
U.S. dollars payment / Japanese yen receipt Foreign exchange forwards 

¥444
70

¥444
—

Notional amount

Maturity over 1 year

¥1
(2)

2019
Fair value (*)(Thousands of U.S. dollars)

Currency swap contracts
U.S. dollars payment / Japanese yen receipt Foreign exchange forwards $4,000
631$4,000
—

$9
(18)

*1 Method for calculating fair value
The fair value is based on prices quoted from counterparty financial institutions.
*2 Currency swap contracts and foreign exchange forwards are the hedging instruments for monetary receivables and payables arisingfrom transactions among consolidated subsidiaries, and designated accounting is applied in non-consolidated financial statements.
(2) Derivative transactions for which hedge accounting has been applied		Currency-related transactions
2018
Hedge item

Notional amount Maturity over 1 year

Foreign exchange forwards
Deferred hedge method
Designated accounting for foreign exchange forward contracts

Fair value (*)(Millions of yen)Accounts receivable Accounts payable Accounts receivable Accounts payable 

¥214
1,731
1,973
373

¥—
—
—
—

¥6
(23)
(*)
(*)

(*) The fair value is based on prices quoted from counterparty financial institutions. Since forward foreign exchange contracts subject
to designated accounting (special treatment for forward foreign exchange contracts) are accounted for together with theunderlying trade receivable or trade payable subject to hedging, the fair value of such contracts is included in the fair value of
those hedged items.
39

Notes to Consolidated Financial Statements

Interest-related transactions
2018
Hedge item

Interest rate swaps
Fixed rate payment / Floating rate receipt
Deferred hedge method
Special treatment of interest rate swap transactions
Integral accounting method of interest rate and currency swap
transactions

Notional amount Maturity over 1 year

Fair value (*)(Millions of yen)

Long-term borrowings Long-term borrowings ¥1,077
23,208¥185
21,604¥1(*)

Long-term borrowings 

1,094

656

(*)

(*) The fair value is based on prices quoted from counterparty financial institutions. Since interest rate swaps subject to special
treatment and interest rate and currency swaps subject to integral accounting method are accounted for together with thecorresponding long-term borrowings subject to hedging, the fair value of such contracts is included in the fair value of the thosehedged items.
Commodity-related transactions
2018
Hedge item

Notional amount Maturity over 1 year

Fair value (*)(Millions of yen)

Aluminum ingot and others forward contracts
Fair value hedge accounting

Accounts receivable Accounts payable 

¥547
2,081

¥—
—

¥29
¥(194)(*) The fair value is based on prices quoted from counterparty trading companies.
Currency-related transactions
2019
Hedge item

Notional amount Maturity over 1 year

Foreign exchange forwards
Deferred hedge method
Designated accounting for forward foreign exchange contracts

Fair value (*)(Millions of yen)Accounts receivable Accounts payable Accounts receivable Accounts payable 

¥121
1,201
1,388
384

¥—
—
—
—

¥(1)
1
(*)
(*)

(*) The fair value is based on prices quoted from counterparty financial institutions. Since forward foreign exchange contracts subject
to designated accounting (special treatment for forward foreign exchange contracts) are accounted for together with theunderlying trade receivable or trade payable subject to hedging, the fair value of such contracts is included in the fair value of
those hedged items.
Interest-related transactions
2019
Hedge item

Notional amount Maturity over 1 year

Fair value (*)(Millions of yen)Interest rate swaps
Fixed rate payment / Floating rate receipt
Deferred hedge method
Special treatment of interest rate swap transactions
Integral accounting method of interest rate and currency swap
transactions

Long-term borrowings Long-term borrowings ¥695
19,926¥598
16,624¥2(*)

Long-term borrowings 

656

219

(*)

(*) The fair value is based on prices quoted from counterparty financial institutions. Since interest rate swaps subject to special
treatment and interest rate and currency swaps subject to integral accounting method are accounted for together with thecorresponding long-term borrowings subject to hedging, the fair value of such contracts is included in the fair value of the thosehedged items.
40

Commodity-related transactions
2019
Hedge item

Notional amount Maturity over 1 year

Fair value (*)(Millions of yen)

Aluminum ingot and others forward contracts
Fair value hedge accounting

Accounts receivable Accounts payable 

¥413
1,890

¥—
—

¥(6)
4

(*) The fair value is based on prices quoted from counterparty trading companies.
Currency-related transactions
2019
Hedge item

Notional amount Maturity over 1 year

Fair value (*)(Thousands of U.S. dollars)

Foreign exchange forwards
Deferred hedge method
Designated accounting for forward foreign exchange contracts

Accounts receivable Accounts payable Accounts receivable Accounts payable $1,090
10,821
12,506
3,460

$—
—
—
—

$(9)
9
(*)
(*)

(*) The fair value is based on prices quoted from counterparty financial institutions. Since forward foreign exchange contracts subject
to designated accounting (special treatment for forward foreign exchange contracts) are accounted for together with theunderlying trade receivable or trade payable subject to hedging, the fair value of such contracts is included in the fair value of
those hedged items.
Interest-related transactions
2019
Hedge item

Notional amount Maturity over 1 year

Fair value (*)(Thousands of U.S. dollars)Interest rate swaps
Fixed rate payment / Floating rate receipt
Deferred hedge method
Special treatment of interest rate swap transactions
Integral accounting method of interest rate and currency swap
transactions

Long-term borrowings Long-term borrowings Long-term borrowings $6,262 $5,388
179,530
149,779
5,910

$18
(*)

1,973

(*)

(*) The fair value is based on prices quoted from counterparty financial institutions. Since interest rate swaps subject to special
treatment and interest rate and currency swaps subject to integral accounting method are accounted for together with thecorresponding long-term borrowings subject to hedging, the fair value of such contracts is included in the fair value of the thosehedged items.
Commodity-related transactions
2019
Hedge item

Notional amount Maturity over 1 year

Fair value (*)(Thousands of U.S. dollars)

Aluminum ingot and others forward contracts
Fair value hedge accounting

Accounts receivable Accounts payable $3,72117,029$––$(54)
36(*) The fair value is based on prices quoted from counterparty trading companies.

41

Notes to Consolidated Financial Statements

8. OTHER COMPREHENSIVE INCOME
Each component of other comprehensive income for the year ended March 31, 2018 and 2019 is as follows:
2018

2019

2019
(Thousands of
U.S. dollars)(Millions of yen)

Unrealized gains (losses) on securities:
Amount arising during the year 
Reclassification adjustments for gains and losses included in profit (loss) attributableto owners of parent 
Before-tax effect Tax effect Net-of-tax amount 
Unrealized gains (losses) on hedges:
Amount arising during the year 
Reclassification adjustments for gains and losses included in profit (loss) attributableto owners of parent 
Before-tax effect Tax effect Net-of-tax amount Foreign currency translation adjustments:
Amount arising during the year 
Reclassification adjustments for gains and losses included in profit (loss) attributableto owners of parent 
Before-tax effect Tax effect Net-of-tax amount 
Remeasurements of defined benefit plans:
Amount arising during the year 
Reclassification adjustments for gains and losses included in profit (loss) attributableto owners of parent 
Before-tax effect Tax effect Net-of-tax amount Equity of other comprehensive income (loss) of affiliates:
Amount arising during the year 
Reclassification adjustments for gains and losses included in profit (loss) attributableto owners of parent 
Before-tax amount 
Tax benefit Net-of-tax amount 
Total other comprehensive income ¥13¥(1,219)$(10,983)

(14)

8

72

(1)
(13)
(14)

(1,211)321(890)(10,911)2,892(8,019)

(494)

(99)

(892)

198
(296)
78
(218)

275
176
(41)
135

2,478
1,586
(370)
1,216

923

(413)

(3,721)

(23)
900
—
900

—
(413)
—
(413)

—
(3,721)—(3,721)964(1,106)(9,965)

319
1,283
(501)
782

15
(1,091)
325
(766)

135
(9,830)2,928(6,902)

362

(397)

(3,576)

—
(397)
—
(397)
¥(2,331)—(3,576)—(3,576)$21,002

97
459
—
459
¥1,909

9. RETIREMENT BENEFIT PLANS
The Company and its domestic consolidated subsidiaries have defined benefit corporate pension plans and a lump-sum payment retirement
benefit plans. Additional benefits may be granted to employees according to the conditions under which termination of employment occurs.
Certain consolidated subsidiaries use the simplified method for calculation of retirement benefit obligation. Certain subsidiaries have defined
contribution plans.

42

The changes in the retirement benefit obligation during the years ended March 31, 2018 and 2019 are as follows:
2018

2019

(Millions of yen)

Balance at the beginning of the year 
Service cost Interest cost 
Actuarial gain or loss Retirement benefits paid 
Others 
Balance at the end of the year ¥38,413
1,764
384
(300)
(1,813)35¥38,483¥38,483
1,869
244
487
(1,185)(1)¥39,897

2019(Thousands of
U.S. dollars)$346,725
16,8392,198
4,388(10,677)(8)$359,465

The changes in plan assets during the years ended March 31, 2018 and 2019 are as follows:
2018

2019

(Millions of yen)

Balance at the beginning of the year 
Expected return on plan assets 
Actuarial gain or loss 
Employer contributions Retirement benefits paid 
Others 
Balance at the end of the year ¥24,593
300
664
1,278
(1,122)44¥25,757¥25,757
625
(619)
2,297
(648)
(3)
¥27,409

2019(Thousands of
U.S. dollars)$232,066
5,631(5,577)
20,696(5,838)(28)$246,950

The changes in liability for retirement benefits accounted for by the simplified method during the years ended March 31, 2018 and 2019 are as follows:
2018

2019

(Millions of yen)

Balance at the beginning of the year 
Increase by acquisition of a consolidated subsidiary Retirement benefit expenses 
Retirement benefits paid Contributions for the plans Balance at the end of the year ¥6,763
25
968
(426)
(281)
¥7,049¥7,049
—
1,017
(542)
(271)
¥7,253

2019(Thousands of
U.S. dollars)$63,510—
9,163(4,883)(2,442)$65,348

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheets as of March 31,2018 and 2019 for the defined benefit plans:
2018

2019

(Millions of yen)

2019
(Thousands of
U.S. dollars)

Unfunded retirement benefit obligation 
Net liability for retirement benefits in the consolidated balance sheets ¥46,386(29,263)
17,1232,652¥19,775¥48,134(31,075)
17,0592,682¥19,741$433,679(279,980)
153,699
24,164$177,863

Liability for retirement benefits 
Net liability for retirement benefits in the consolidated balance sheets ¥19,775¥19,775¥19,741¥19,741$177,863$177,863

Funded retirement benefit obligation 
Fair value of plan assets 43Notes to Consolidated Financial Statements

The components of retirement benefit expenses for the years ended March 31, 2018 and 2019 are as follows:
2018

2019

(Millions of yen)

Service cost Interest cost Expected return on plan assets 
Amortization of unrecognized actuarial gain or loss Amortization of prior service cost Retirement benefit expenses accounted for by the simplified method Retirement benefit expenses on the defined benefit plan ¥1,764
384
(300)
333
(20)
968
¥3,129

2019(Thousands of
U.S. dollars)¥1,869
244
(625)
53
(25)
1,017
¥2,533$16,839
2,198(5,631)
478
(225)
9,163
$22,822

The components of remeasurements of defined benefit plans included in other comprehensive income (before tax effect) for the years ended March
31, 2018 and 2019 are as follows:
2018

2019

(Millions of yen)

Prior service cost 
Actuarial gain or loss 
Total ¥20
(1,303)¥(1,283)

2019(Thousands of
U.S. dollars)

¥25
1,066
¥1,091

$225
9,605
$9,830

Remeasurements of defined benefits plans included in accumulated other comprehensive income (before tax effect) as of March 31, 2018 and2019 are as follows:
2018

2019

(Millions of yen)

Unrecognized prior service cost 
Unrecognized actuarial gain or loss 
Total ¥(180)
959
¥779

2019
(Thousands of
U.S. dollars)¥(155)2,025¥1,870$(1,397)
18,245$16,848

The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2018 and 2019 is as follows:
General account 
Domestic bonds 
Foreign stocks Domestic stocks Foreign bonds 
Others 
Total 

2018

2019

34%
24%
14%
11%
9%
8%
100%

33%
22%
15%
10%
8%
12%
100%

The ratio of the retirement benefit trust, set to the corporate pension plan, in the total fair value of plan assets is 3% and 3% at March 31, 2018 and2019, respectively.
The expected return on assets is estimated based on the anticipated allocation to each asset category and the expected long-term returns on
assets held in each category.
The assumptions used in accounting for the above plans were as follows:
Discount rate Expected rate of return on plan assets 

44

2018

2019

1.0%
1.0%

1.0%
1.0%

Required contribution of the consolidated subsidiaries for the defined contribution plans for the years ended March 31, 2018 and 2019 is as follows:
2018

2019

2019
(Thousands of
U.S. dollars)(Millions of yen)

¥44

¥7

Required contribution $396

10. INCOME TAXES
Significant components of deferred tax assets and liabilities at March 31, 2018 and 2019 are as follows:
2018

2019

2019
(Thousands of
U.S. dollars)(Millions of yen)

Deferred tax assets:¥7,576¥6,340$57,122

Net defined benefit liabilities

6,165

5,987

53,942

Accrued bonuses

1,972

2,063

18,587

Unrealized intercompany loss

1,962

1,962

17,677

Allowance for doubtful accounts

1,591

1,417

12,767

Loss on disposal of fixed assets

698

94

847

Other

8,411

7,179

64,682

28,37525,042

225,624

Valuation allowance for tax loss carry forwards

—

6,292

56,690

Valuation allowance for deductible temporary differences

—

6,818

61,429Total Valuation allowance

(14,941)(13,110)(118,119)

Total deferred tax assets, net of valuation allowance

13,434

11,932

107,505

Undistributed retained earnings of subsidiaries and associates(1,376)(1,841)(16,587)

Unrealized gain on securities

(1,548)(1,244)(11,208)

Revaluation gain on subsidiaries

(974)

(974)

(8,776)

Unrealized intercompany gain

(907)

(907)

(8,172)Other

(1,066)(477)(4,298)(5,871)(5,443)(49,041)¥7,563¥6,489$58,464

Tax loss carry forwards

Gross deferred tax assets

Deferred tax liabilities:

Total deferred tax liabilities
Net deferred tax assets

Notes: A breakdown of tax loss carry forwards and valuation allowance by expiry date as of March 31, 2019 is as follows:
2019

Due
within1 yearDue after 1
year through2 years

Due after 2
years through3 years

Due after 3
years through4 years

Due after 4
years through5 yearsDue
after 5
years

Total

(Millions of yen)Tax loss carry forwards ¥2,882¥201¥1,360

¥533

¥278

¥1,086¥6,340

Valuation allowance (2,882)(153)(1,360)

(533)

(278)

(1,086)(6,292)

Deferred tax assets 

¥—

¥48

¥—

¥—

¥—

¥—

¥48
(b)

45

Notes to Consolidated Financial Statements

2019

Due
within1 yearDue after 1
year through2 years

Due after 2
years through3 years

Due after 3
years through4 years

Due after 4
years through5 yearsDue
after 5
years

Total

$57,122(Thousands of U.S. dollars)

Tax loss carry forwards $25,966$1,811$12,253$4,802$2,505$9,785

Valuation allowance (25,966)(1,379)(12,253)(4,802)(2,505)(9,785)(56,690)

$—

$432
(b)

$—

Deferred tax assets 

$432

$—

$—

$—

(a) The amount is determined by multiplying the corresponding tax loss carry forwards by the effective statutory tax rate.
(b) The Company considers these deferred tax assets recoverable based on the expected future taxable income.
Deferred tax assets and liabilities that comprise net deferred tax assets are included in the following accounts of the accompanying consolidatedbalance sheets:
2018

2019

2019
(Thousands of
U.S. dollars)(Millions of yen)

Deferred tax assets (investments and other assets) ¥7,788¥6,618$59,627

(225)

(129)

(1,162)Other long-term liabilities 

A reconciliation of the differences between the effective statutory income tax rate and the effective income tax rate for the years ended March
31, 2018 and 2019 was summarized as follows:
2018

30.9%

Effective statutory income tax rate Increase (decrease) in taxes resulting from:
Change in valuation allowance
Equity in earnings of affiliates
Effect of tax rate difference of foreign subsidiaries
Undistributed retained earnings of subsidiaries and associates Inhabitant taxes per capital
Permanently non-deductible expenses 
Other
Effective income tax rate 

2019

—

(2.5)
(1.2)
(0.4)
(0.1)
0.6
0.4
(2.5)
25.2%

Since the difference between the effective statutory income tax rate and the effective income tax rate was equal or less than 5% of the effective
statutory income tax rate, the reconciliation for the year ended March 31, 2019 is not presented.
11. APPROPRIATIONS OF RETAINED EARNINGS(1) The following appropriation (cash dividends) was approved and recorded for the year ended March 31, 2018 and 2019, respectively:
2018

46

Resolution made at

Type ofsharesTotal dividends(Millions of yen)

Dividends per
share (yen)Source ofdividends

Cut-off date

Effective date

The ordinary general meeting ofshareholders on June 27, 2017

Commonstock¥3,097¥5.00

Retainedearnings

March 31,2017

June 28,2017

The meeting of the Board of
Directors on October 27, 2017

Commonstock¥2,478¥4.00

Retainedearnings

September
30, 2017

December 1,
2017

2019

Resolution made at

Type ofsharesTotal dividends Total dividends (Thou- Dividends per Dividends per share(Millions of yen)share (yen)(U.S. dollars)
sands of U.S. dollars)

The ordinary general meeting ofshareholders on June 26, 2018

Commonstock¥2,478$22,326¥4.00

The meeting of the Board of
Directors on October 30, 2018

Commonstock¥2,478$22,326¥4.00

Source ofdividends

Cut-off date

Effective date

$0.04

Retainedearnings

March 31,2018

June 27,
2018

$0.04

Retainedearnings

September
30, 2018

December
3, 2018(2) Dividends with the cut-off date in the year ended March 31, 2019 and the effective date in the year ending March 31, 2020 are as follows:
2019

Resolution made at

Type ofsharesThe ordinary general meeting ofshareholders on June 25, 2019

Commonstock

Total dividends Total dividends (Thou- Dividends per Dividends per share(Millions of yen)share (yen)(U.S. dollars)
sands of U.S. dollars)¥3,097$27,903

¥5.00

$0.04

Source ofdividends

Cut-off date

Effective date

Retainedearnings

March 31,2019

June 26,
2019

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 recorded in the consolidated financial
statements for the year which the cuf-off date of dividend belongs to, but are recorded in the consolidated financial statements in the subsequent
year after shareholders’ approval has been obtained.
12. REVALUATION SURPLUS
A consolidated subsidiary of the Company revalued its land used for business purposes in accordance with the Land Revaluation Law. The
Company recognized its portion of consolidated subsidiary’s revaluation surplus in net assets.
13. DERIVATIVESIn the normal course of business, the Company and its consolidated subsidiaries utilize various derivative financial instruments in order tomanage the exposure to 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.
14. NOTES TO CONSOLIDATED STATEMENT OF INCOME
Inventories
The amount of inventories written down due to a decline in profitability for the years ended March 31, 2018 and 2019 was ¥(416) million and¥(331) million ($(2,982) thousand), respectively which is included in cost of sales.
Selling, general and administrative expenses
Main components of selling, general and administrative expenses for the year ended March 31, 2018 and 2019 were as follows:
2018

2019

(Millions of yen)

Freight charges Salaries, allowances and bonuses ¥12,508
19,373¥13,028
20,433

2019(Thousands of
U.S. dollars)$117,380
184,098

Research and Development
Research and development costs charged to cost of sales and selling, general and administrative expenses for the years ended March 31, 2018 and2019 were ¥5,177 million and ¥5,447 million ($49,076 thousand), respectively.
15. CONTINGENT LIABILITIESContingent liabilities at March 31, 2018 and 2019 are ¥1,529 and ¥1,391 million ($12,533 thousand), respectively, for loans guaranteed and otherguarantees given in the ordinary course of business.

47

Notes to Consolidated Financial Statements

16. LOSS ON IMPAIRMENT OF FIXED ASSETS
The consolidated subsidiaries recognized ¥933 million of loss on impairment of fixed assets in the consolidated statements of income, and thesignificant items of such impairment loss for the year ended March 31, 2018 were as follows:
2018

Location
Jiangsu, China

Major use
Operating assets

Asset category
Machinery and equipment 
Tools, furniture and fixtures (Millions of yen)

¥451
2
¥453

Total

Since the operating assets in Jiangsu, China have become idle and shown signs of impairment, the consolidated subsidiaries recognized an
impairment loss of ¥453 million, measured by the net realizable value, as a result of noting a sign of impairment and evaluating a necessity of theimpairment loss recognition.
The consolidated subsidiaries have grouped the operating assets by independent operating divisions which generate cash flows, the rental
assets by administrative business divisions, and idle assets by individual asset itself.
The consolidated subsidiaries recognized ¥957 million ($8,622 thousand) of loss on impairment of fixed assets in the consolidated statements
of income, and the significant items of such impairment loss for the year ended March 31, 2019 were as follows:
2019

Location
Guangdong, China

Major use
Operating assets

Asset category
Buildings and structures 
Machinery and equipment 
Tools, furniture and fixtures 
Others (Millions of yen)

¥367
450
48
47
¥912

Total

(Thousands of U.S. dollars)$3,307
4,054
432
424
$8,217Since the cash flows generated from operating activities resulting from the use of the groups of assets have become extremely worse, theconsolidated subsidiaries recognized an impairment loss of ¥912 million ($8,217 thousand), measured by the net realizable value (mainly basedon the real estate appraisal value), as a result of noting a sign of impairment and evaluating a necessity of the impairment loss recognition.
The consolidated subsidiaries have grouped the operating assets by independent operating divisions which generate cash flows, the rental
assets by administrative business divisions, and idle assets by individual asset itself.
17. AMOUNTS PER SHARE
Net profit and net assets per share as of March 31, 2018 and 2019 and for the years then ended were summarized as follows:
1. Number of shares
2018

2019

(Thousands of shares)

Weighted average number of shares 
Effect of convertible bonds 
Diluted number of shares 

619,227—
619,227

619,221—619,221

2018

2019

2. Net profit per share(Millions of yen)

Net profit ¥18,012¥20,560

2018

2019
(yen)

Net profit per share 
Diluted net profit per share 48¥29.09¥—

2019(Thousands of U.S. dollars)$185,242
2019(U.S. dollars)¥33.20¥ —$0.30$—3. Net assets per share
2018

2019

2019
(Thousands of
U.S. dollars)(Millions of yen)

Total net assets 
Non-controlling interests 
Net assets attributable to shares of common stock ¥189,322(15,365)¥173,957¥202,735(14,881)¥187,854

2018

2019

$1,826,606(134,075)$1,692,531
2019

(yen)

Net assets per share ¥280.93(U.S. dollars)¥303.37$2.73

18. BUSINESS COMBINATION(a) Business combination through acquisition(1) Name of acquired companies and outline of business
Name of acquired companies
Sumikei-Nikkei Engineering Co., Ltd. (hereinafter referred to as “SNE”)
Outline of business
Design, manufacturing, sales, construction and maintenance of various landscape products(2) Reason for business combination
We aim to accelerate innovation for new products and business to create value for customers by combining SNE’s sales and engineering
capabilities and NLM group’s advanced technology and development skills.
(3) Date of business combination
September 28, 2018(4) Legal form of business combination
Acquisition of shares for cash consideration(5) Post-business combination company name
No change(6) Percentage of voting rights acquired
Voting rights held immediately before stock acquisition 
Percentage of additional voting rights acquired on the date of business combination 
Voting rights after stock acquisition 

50.0%
31.0%
81.0%

(7) Main basis for determining acquired company
The Company acquired shares with cash.
(b) The acquired companies are included in the consolidated financial statements from October 1, 2018 to March 31, 2019
(C) Cost of acquisition and its components
The fair value of common stock of SNE held immediately before stock acquisition 
The fair value of additional common stock of SNE acquired on the date of business combination 
Acquisition cost of the acquired company (Millions of yen)(Thousands of U.S. dollars)¥3,500
2,170¥5,670$31,535
19,551$51,086(d) The difference between acquisition cost of the acquired company and the total costs of stock acquisition transactions
Gain on step acquisitions (Millions of yen)(Thousands of U.S. dollars)¥1,371$12,353

49

Notes to Consolidated Financial Statements(e) Amount of goodwill, reason for recognition, amortization method and period(1) Goodwill arising from the acquisition¥2,221 million ($20,011 thousand)(2) Reason for the recognition
Expectation of future excess earning power due to business development(3) Amortization method and period
Straight-line amortization over 5 years(f) Amount of assets acquired and liabilities assumed on the day of the acquisition(1) Assets
Current assets 
Non-current assets 
Total assets (Millions of yen)(Thousands of U.S. dollars)¥7,894$71,124

319

2,874

¥8,213$73,998(Millions of yen)(Thousands of U.S. dollars)¥3,942$35,517

13

117¥3,955$35,634(2) Liabilities
Current liabilities Long-term liabilities 
Total liabilities (g) Approximate effects in the consolidated statements of income as if the business combination was completed at the beginning of thecurrent fiscal year, and its method of calculation
Estimated effects are not disclosed since they are not material.
18. SEGMENT INFORMATION(1) Outline of reportable segments
The reportable segments are components of the Company and its consolidated subsidiaries, for which their discrete financial information isavailable, and whose operating results are regularly reviewed by the Board of Directors to make decisions about resources to be allocated to thesegments and assess their performance.
The Company and its consolidated subsidiaries operate under four distinct business segments mainly in Japan: “Aluminum ingot andchemicals,” “Aluminum sheet and extrusions,” “Fabricated products and others” and “Aluminum foil, powder and paste.”
The “Aluminum ingot and chemicals” segment supplies aluminum remelted ingot used for various industrial materials, and produces awide spectrum of alumina 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 “Fabricatedproducts and others” segment produces a variety of products which include wing bodies for transport vehicles, automobile components andelectronic materials. The “Aluminum foil, powder and paste” segment produces aluminum foil and aluminum powder used for various fields,such as daily necessaries, energy, electronics and automobile. “Adjustment” includes unallocated operating expenses and corporate assets not
specifically related to reportable segments.
(2) Calculation method of net sales, profit or loss, assets and other items on each reportable segment
The accounting policies applied by each reportable segment are consistent with those described in “Note 1. Significant Accounting Policies.”
Segment profit or loss presented in segment information is calculated based on operating income in the consolidated statements of income.
Intersegment sales and transfer are determined based on market value.
(3) Information on net sales, profit or loss, assets and other items by each reportable segment
Reportable segment information for the years ended March 31, 2018 and 2019 was as follows:

50

2018

The reportable segments
Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts
and others

Aluminum
foil, powder
and paste

Adjustment(Note 1)

Consolidated(Millions of yen)

Net sales
Customers ¥111,100¥106,955¥169,019¥94,365¥—¥481,439

Intersegment 

46,71424,997

12,344

510(84,565)—

Total 157,814

131,952

181,363

94,875(84,565)

481,439

Operating profit ¥8,954¥9,767¥9,783¥4,856¥(3,467)¥29,893

Segment assets ¥122,686¥117,781¥156,789¥97,821¥(27,777)¥467,300

Depreciation and amortization ¥3,886¥5,187¥3,814¥4,046¥193¥17,126

Amortization of goodwill 

¥6

¥602

¥244

¥81

¥—

¥933

Loss on impairment of fixed assets ¥4,442¥2,262¥5,912¥3,140¥—¥15,756

Investment in equity-method affiliates¥5,914¥5,414¥4,624¥5,001¥124¥21,077

Capital expenditures ¥4,198¥5,376¥6,074¥4,046¥214¥19,908(Note 1). Explanations of adjustments amounts are as follows.
1) Adjustments of ¥(3,467) million in segment profit are general corporate expenses.
2) Adjustments of ¥(27,878) million in segment assets include ¥(46,117) million in the elimination of transactions between segmentsand ¥18,239 million in corporate assets.
3) Adjustments of ¥193 million in depreciation and amortization expenses are mainly composed of those of corporate assets.
4) Adjustments of ¥124 million for capital expenditures are the increase in corporate assets.
(Note 2). Segment profits (losses) were reconciled to operating income (loss) in the consolidated statements of income.
2018

The reportable segments
Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts
and others

Aluminum
foil, powder
and paste

Adjustment(Note 1)

Consolidated(Millions of yen)

Net sales
Customers ¥117,008¥107,835¥180,259¥95,349¥—¥500,451

Intersegment 

48,27225,14913,685

522(87,628)—

Total 165,280

132,984

193,944

95,871(87,628)

500,451

Segment profit (Note2) ¥9,616¥7,152¥11,681¥5,114¥(3,511)¥30,052

Segment assets ¥ 129,876¥114,630¥168,023¥100,110¥(31,336)¥481,303

Depreciation and amortization ¥3,631¥5,109¥4,352¥3,997¥205¥17,294

Amortization of goodwill 

¥—

¥—

¥222

¥—

¥—

¥222

Loss on impairment of fixed assets 

¥—

¥40

¥—

¥917

¥—

¥957

Investment in equity-method affiliates ¥4,274¥2,247¥3,746

¥

,895

¥—

¥14,162

Capital expenditures ¥12,142¥5,037¥6,050¥6,484¥213¥29,926

51

Notes to Consolidated Financial Statements

2019

The reportable segments
Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts andothers

Aluminum
foil, powder
and paste

Adjustment(Note 1)

Consolidated(Thousands of U.S. dollars)

Net sales
Customers $1,054,221$971,574$1,624,102$859,077$—$4,508,974

Intersegment 434,922226,588

123,299

4,704(789,513)—

Total 1,489,143

1,198,162

1,747,401

863,781(789,513)

4,508,974

Segment profit (Note2) $86,638$64,438$105,244$46,076$(31,633) $270,763

Segment assets $1,170,160$1,032,796$1,513,857$901,973$(282,332) $4,336,454

Depreciation and amortization $32,715$46,031$39,211$36,012$1,847$155,816

Amortization of goodwill 

$—

$—

$2,000$—$—$2,000

Loss on impairment of fixed assets 

$—

$360

$—

$8,262$—$8,622

Investment in equity-method affiliates $38,508$20,245$33,751$35,093$—$127,597

Capital expenditures $109,397$45,382$54,509$58,420$1,919$269,627(Note 1).Explanations of adjustments amounts are as follows.
1) Adjustments of ¥(3,511) million ($(31,633) thousands) in segment profit are general corporate expenses.
2) Adjustments of ¥(31,336) million ($(282,332) thousands) in segment assets include ¥(47,063) million ($(424,029) thousands) in theelimination of transactions between segments and ¥15,727 million ($141,697 thousands) in corporate assets.
3) Adjustments of ¥205 million ($1,847 thousands) in depreciation and amortization expenses are mainly composed of those of corporate assets.
4) Adjustments of ¥213 million ($1,919 thousands) for capital expenditures are the increase in corporate assets.
(Note 2).Segment profits (losses) were reconciled to operating income (loss) in the consolidated statements of income.
Geographical sales for the years ended March 31, 2018 and 2019 were summarized as follows:
2018

Japan

Other

2019

Total

Japan

(Millions of yen)

¥383,889¥97,550

Other

2019

Total

Japan

(Millions of yen)

¥481,439¥400,889¥99,562

Other

Total

(Thousands of U.S. dollars)¥500,451$3,611,938$897,036$4,508,974

Geographical property, plant and equipment as of March 31, 2018 and 2019 were summarized as follows:
2017

Japan

Other

2018

Total

Japan

(Millions of yen)

¥134,835

52¥19,167

Other

2018

Total

(Millions of yen)¥154,002¥147,525¥17,043

Japan

Other

Total

(Thousands of U.S. dollars)¥164,568$1,329,174$153,554$1,482,728

Information on amortization of goodwill and unamortized balance by each reportable segment as of March 31, 2019 and for the year thenended (none for 2018) is as follows:
2019

The reportable segments
Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts andothers

Aluminum
foil, powder
and paste

Adjustment

Consolidated(Millions of yen)Amortization of goodwill 

¥—

¥—

¥222

¥—

¥—

¥222

Balance as of March 31 

¥—

¥—

¥1,999¥—¥—¥1,999

Aluminum
foil, powder
and paste

Adjustment

Consolidated

2019

The reportable segments
Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts andothers(Thousands of U.S. dollars)

Amortization of goodwill 

$—

$—

$2,000$—$—$2,000

Balance as of March 31 

$—

$—

$18,011$—$—$18,011

53

Report Of Independent Auditors

54

Overseas Network

OVERSEAS SUBSIDIARIES AND AFFILIATES
North America
Nikkei MC Aluminum
America,Inc.
Indiana, U.S.A.
Phone: +1-812-3421141
Aluminum alloys(60%)
Toyal America,Inc.
Illinois, U.S.A.
Phone: +1-815-740-3037
Aluminum powder and paste(100%)
EuropeToyal Europe SASU
Accous, France
Phone: +33-5-59-9835-36
Aluminum powder and paste(100%)
East Asia
Nikkei MC Aluminum(Kunshan)Co.,Ltd.
Jiangsu, China
Phone: +86-512-5763-1946
Aluminum alloys(85%)
Guangxi Zhengrun Nikkei High
Purity Aluminium Technology
Co.,Ltd.
Guangxi, China
Phone: +86-0774-8838833
Aluminum high purity metal(49%)
Nonfemet international(China-Canada-Japan)
Aluminium Co., Ltd.
Shenzhen,China
Phone: +86-755-86006987
Aluminum extrusion(18%)

Toyo Precision
Appliance(Kunshan)Co.,Ltd.
Jiangsu, China
Phone: +86-512-57812388
IT related case(85%)

Sam-A Aluminium Co.,Ltd.
Seoul, Korea
Phone: +82-2-34580600
Aluminum foil, paste(33.4%)

Shandong Nikkei Conglin
Automotive Parts Co.,Ltd.
Shandong, China
Phone: +86-535-8567839
Automobiles components(55%)

Southeast Asia
Nikkei MC Aluminum(Thailand)Co.,Ltd.
Chachengsao, Thailand
Phone: +66-38-522296
Aluminum alloys(79.4%)

Nikkei(Shanghai)
Body Parts Co.,Ltd.
Jiangsu, China
Phone: +86-512-65710550
Automobiles components(100%)
Shandong Conglin Fruehauf
Automobile Co.,Ltd.
Shandong, China
Phone: +86-535-8567976
Trailers and trucks(50%)
Hunan Ningxiang JiWeiXin
Metal Powder Co.,Ltd.
Hunan, China
Phone: +86-731-87890331
Aluminum powder(90%)
Toyal Zhaoqing Co.,Ltd.
Guangdong, China
Phone: +86-758-3602080
Aluminum paste(90%)

CMR Nikkeik India Pvt, Ltd.
Bawal, India
Phone: +91-128-4200125
Aluminum alloys(26%)
Nikkei Siam Aluminium Ltd.
Pathumtani, Thailand
Phone: +66-2529-5299
Aluminum sheet, foil
(100%)
Fruehauf Mahajak Co.,Ltd.
Bangkok, Thailand
Phone: +66-2548-3733
Trailers and trucks(70%)
Toyal MMP India Pvt,Ltd.
Nagpur, India
Phone: +91-73501-77076
Aluminum paste(74%)(As of March 31, 2019)55

Directors And Officers

Directors

Audit & Supervisory Board Member

President
Representative Director

Nobuo Matsumoto
Kotaro Yasuda
Masahiro Yoshida
Yuzuru Fujita*2
Koji Yasui*2
Shintaro Kawai*2*2 Outside Member

Ichiro Okamoto
President and CEO of Nippon Light Metal Co., Ltd
Directors

Toshihide Murakami
Yasunori Okamoto
Hiroshi Yamamoto
President and CEO of Toyo Aluminium K.K.

Hiroyasu Hiruma
President and CEO of Nippon Fruehauf Co., Ltd.

Sho Adachi
President and Representative Director of Nikkeikin
Kakoh Kaihatsu Holdings Co., Ltd.

Yoshihiro Tomioka
Toshikazu Tanaka
Masahito Saotome
Masato Ono*1
Ryoichi Hayashi*1
Haruo Ito*1
Toshihito Hayano*1

Officers

Masamichi Ueda
Minoru Sotoike
Kazuto Sanada
Masakazu Ichikawa
Kazuyoshi Sugiyama*1 Outside Director(As of June 25, 2019)56

Profile

Corporate Data

Since its establishment, the NLM Group has been Japan’s sole fully integrated aluminum manufacturer
offering varieties of products ranging from aluminum raw material to fabricated products.
Aluminum has properties that make it a superb industrial material: it is lightweight and has
excellent processability, corrosion resistance, thermal conductivity, and recyclability. Nippon Light
Metal applies its core strengths — a wealth of knowledge about aluminum and its characteristics andtechnological capabilities that have been developed over many years — to supply a highly diversified

Company Name

Major Shareholders

Nippon Light Metal Holdings Company, Ltd.
https://www.nikkeikinholdings.co.jp(Ratio of Stock Holding)
The Master Trust Bank of Japan, Ltd.
(trust accounts)(8.7%)

range of products to a number of key industrial sectors, including the automotive, electrical andEstablishedelectronics, information and telecommunication, environment, safety, energy,

October 1. 2012

construction, railroad, and food products industries.
By carrying on development of new applications for aluminum and aluminum materials, thePaid-In Capital

NLM Group is to continue to support customers in wide-ranging industrial sectors and contribute to¥46,525 million

improving the quality of people’s lives and protection of the environment.

Shares of Common Stock
Authorized: 2,000,000,000
Issued: 619,937,500

NLM Group

Number of Shareholders

Nippon Light Metal Holdings Company, Ltd. and its consolidated subsidiaries Years ended March 31

57,185
2019

2018

2019
Thousands of
U.S. dollars

Millions of yen

For the year:
Net sales 
Operating profit Profit attributable to owners of parent ¥481,439 ¥500,451 $4,508,974
29,89330,052
270,763
18,012
20,560185,242At year-end:
Total assets 
Net assets 
Short-term borrowings and long-term debt,
including bonds and capital lease obligation 
Net Sales

467,300
189,322481,303
202,735

4,336,454
1,826,606

141,494

143,742

1,295,090

Operating Profit

Stock Exchange Listings
Tokyo
Transfer Agent of Common Stock

35

500

400

28

400

300

21

300

200

14

200

100

7

100

The Dai-ichi Mutual Life Insurance Co.
(3.2%)
Japan Trustee Services Bank,Ltd(trust accounts 9)(3.2%)
Nikkei-Keiyu-Kai(2.6%)The Light Metal Educational Foundation, Inc.
(2.4%)
Asahi Mutual Life Insurance Co.
(2.1%)

Sumitomo Mitsui Trust Bank, Ltd.
Last Shareholders’ Meeting

JPMC GOLDMAN SACHS TRUST JASDEC
LENDING ACCOUNT (1.9%)

June 25, 2019
Mizuho Bank, Ltd.
(1.8%)

Total Assets

500

Japan Trustee Services Bank, Ltd.
(trust accounts)(8.7%)

Japan Trustee Services Bank,Ltd(trust accounts 5)(1.7%)(As of March 31, 2019)

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, as well
as shifts in Japanese government policies and regulations. The Company cautions, therefore, that the projections and estimates contained

0

2014

2015

Billions of yen

2016

2017

2018

2019

Years ended March 31

0

2014

2015

Billions of yen

2016

2017

2018

2019

Years ended March 31

0

2014

2015

Billions of yen

2016

2017

2018

2019

herein involve risk and uncertainty, and that actual results could differ materially from those expressed or implied.

As of March 31

57

NIPPON LIGHT METAL HOLDINGS COMPANY, LTD. ANNUAL REPORT 2019https://www.nikkeikinholdings.co.jp

Nippon Light Metal Holdings Company, Ltd.
1-1-13 Shimbashi, Minato-ku, Tokyo 105-8681 Japan
Urbannet Uchisaiwaicho Building
https://www.nikkeikinholdings.co.jp

Printed in Japan

ANNUAL REPORT 2019Year ended March 31, 2019