ANNUA L REP ORT 2013
Year ended March 31, 2013

Profile
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
range of products to a number of key industrial sectors, including the automotive, electrical andelectronics, information and telecommunication, environment, safety, energy, construction, railroad,and food products industries.
By carrying on development of new applications for aluminum and aluminum materials, the
NLM Group is to continue to support customers in wide-ranging industrial sectors and contribute toimproving the quality of people’s lives and protection of the environment.

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

For the year:
Net sales
Operating profit
Net income
At year-end:
Total assets
Net assets
Short-term borrowings and long-term debt,
including bonds and capital lease obligation
Net Sales

800

2013

2013

Millions of yen

Thousands of
U.S. dollars¥371,887
8,154
3,355

$3,954,141
86,69835,672419,786
114,624

4,463,434
1,218,756

193,883

2,061,489

Operating Profit

Nippon Light Metal Holdings Company, Ltd.

Nippon Light Metal Holdings Company, Ltd.

Nippon Light Metal Company, Ltd.

Nippon Light Metal Company, Ltd.

35

Total Assets
Nippon Light Metal Holdings Company, Ltd.

600

Nippon Light Metal Company, Ltd.

30
25

600

450

20
15

400

10

300

5
0

200

150

-5
-10

0

2008 2009 2010 2011 2012 2013

Billions of yen

Years ended March 31-15

2008 2009 2010 2011 2012 2013

Billions of yen

Years ended March 3102008 2009 2010 2011 2012 2013

Billions of yen

As of March 31

Contents

Consolidated Financial Highlights ................................................................................................................ C2
To Our Shareholders....................................................................................................................................... 2
Special Feature ............................................................................................................................................... 4
NLM Topics ...................................................................................................................................................... 6
Corporate Governance And Internal Control Systems ............................................................................. 8
NLM Group Environmental Activities ......................................................................................................... 10
NLM Group ....................................................................................................................................................... 11
Review Of Operations..................................................................................................................................... 12
Consolidated Six-Year Summary .................................................................................................................. 16
Financial Review ............................................................................................................................................. 18
Consolidated Balance Sheets ...................................................................................................................... 20
Consolidated Statements Of Income ........................................................................................................... 22
Consolidated Statements Of Comprehensive Income .............................................................................. 23
Consolidated Statements Of Changes In Net Assets ............................................................................... 24
Consolidated Statements Of Cash Flows .................................................................................................... 25
Notes To Consolidated Financial Statements ............................................................................................ 26
Report Of Independent Auditors .................................................................................................................. 40
Overseas Network .......................................................................................................................................... 41
Directors And Officers ................................................................................................................................... 42
Corporate Data ................................................................................................................................................ 43

Per share data (yen and dollars):
Net income —basic—diluted
Cash dividends
Net assets
Stock information (TSE) (yen and dollars):
Stock price:
High
Low

2013

2013

yen

U.S. dollars

¥

6.17
—
3.00
193.33

$

0.07
—
0.03
2.06

¥

118
65

$

1.25
0.69

Note: U.S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥94.05 = U.S.$1.00. See Note 2 of the Notes to the Consolidated Financial Statements.

30.0

Net Income per Share

Net Assets per Share

Nippon Light Metal Holdings Company, Ltd.

Nippon Light Metal Holdings Company, Ltd.

Nippon Light Metal Company, Ltd.

Nippon Light Metal Company, Ltd.

250.0

200.0

Cash Dividends per Share
Nippon Light Metal Holdings Company, Ltd.

4.0

Nippon Light Metal Company, Ltd.

3.0

0
150.0
2.0
100.0
-30.0
1.0

50.0

-60.0
Yen

0

2008 2009 2010 2011 2012 2013
Years ended March 31

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

Yen

2008 2009 2010 2011 2012 2013
Years ended March 31

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

0
Yen

2008 2009 2010 2011 2012 2013
As of March 31

1

To Our Shareholders

Overview of Fiscal 2012

Takashi Ishiyama, President and CEO

I would like to take this opportunity to extend mysincere gratitude to our shareholders for theircontinued support of our business operations.
Nippon Light Metal Holdings Company, Ltd. (“NLM
Holdings”) was established on October 1, 2012,
through a sole-share transfer by Nippon Light Metal
Company, Ltd. (“NLM”), as a holding company
presiding over the entire Group. The first fiscal year
for NLM Holdings is from October 1, 2012 to March
31, 2013; however, the fiscal year under review
is from April 1, 2012 to March 31, 2013, because
the consolidated financial statements have been
prepared by inheriting those of NLM.
Furthermore, since shares were transferred throughthe sole-share transfer method, there is no real change
in the scope of consolidation from that under NLM.
Therefore, comparisons with the consolidated results
for the year ended March 31, 2012 (fiscal 2011) for
NLM have been included as a reference for year-onyear comparison.
2

During the year under review, in the domestic aluminum
industry, the demand situation varied from field to field.
Transport and construction-related shipments increased,
but shipments for electrical and electronics products, alongwith metal products, remained stagnant. As a result, overall
aluminum product demand was roughly equal to that of theprevious year.
Given these circumstances, the Group worked to further
strengthen the revenue base, based on the policies laid out inthe three-year Mid-Term Management Plan (from fiscal 2010
to fiscal 2012) of which the fiscal year under review is the
final year. The Group also worked to implement thorough cost
reduction measures, and strove to improve business results
throughout the Group.
However, flagging sales of solar cell-related products
and alumina and chemicals-related products made a large
impact, and as a result, consolidated net sales for the year
under review decreased 7.7% year on year, to ¥371.9 billion.
Consolidated operating profit and consolidated ordinary profit
decreased 40.3% and 29.2% year on year, to ¥8.2 billion and¥6.9 billion, respectively. Consolidated net income increased
17.5% year on year to ¥3.4 billion.
Year-end dividend payment will be ¥3 per share, ¥1 greaterthan year-end dividend payments for the previous year for NLM.

Overview by Business Segment
Sales in the Alumina, Chemicals and Aluminum Ingot
segment decreased 5.7% year on year, to ¥93.9 billion,
while operating profit decreased 37.4% year on year, to ¥3.3
billion. With regards to sales, both domestic demand andexports of alumina-related products flagged. Domestic salesof automobile-related products, the core of the Aluminum
Ingot operations, also fell due to the end of “Eco-car” subsidy
and other factors, resulting in a drop of revenue. In terms of
profits, profits declined due to the impact of increased fuel andelectricity costs.
Sales in the Aluminum Sheet and Extrusions segment
decreased 10.6% year on year, to ¥63.2 billion, while operating
profit increased 6.8% year on year, to ¥1.7 billion. Transportrelated shipments increased mainly for van and truck
outfitting. However, the slump in electrical and electronics

products was reflected in the result of a drop in revenue, but
profits rose, in part thanks to the effect of fixed cost reductions
by the Aluminum Sheet operations.
Sales in the Fabricated Products and Others segment
decreased 1.4% year on year, to ¥126.2 billion, while operating
profit increased 9.1% year on year, to ¥7.0 billion. Despite anincrease in sales in the van and truck outfitting business dueto the earthquake recovery demand and the effect of “Ecocar” subsidy, shipments were weak in the Electronic Materials
sector, resulting in net sales roughly in line with those of theprevious year. However, profits increased, partly due to thestrong performance of the Panel System sector.
Sales in the Aluminum Foil, Powder and Paste segment
decreased 15.5% year on year, to ¥88.6 billion, and operating
profit and loss was posted as ¥0.8 billion in operating loss,
compared to ¥3.4 billion in operating profit in the previous year.
Significant sales drop of solar cells-related products reduced
revenue. In terms of profits, a dramatic drop in the selling pricefor solar cell-related products triggered by oversupply, as well
as a sizable loss posted following disposal of inventory due to ashift in market trends, also deteriorated profits.

Key Topics during Fiscal 2012
Overseas, in July 2012, the Group established a heat insulation
panel manufacturing plant in Thailand. This will allow us
to use the advantages of local production to offer quality andstable delivery times to customers expanding into the area. In
addition, the Group will leverage the sales network at our local
subsidiary in Vietnam established in October 2011 to expand
the business in the Southeast Asian region, where the market
is expected to grow in the future.
In September, the Group established CMR Nikkei India
Private Ltd., a local joint venture in India, as the site for
manufacturing and sales of aluminum alloys in northern
India. The Group will carry out expansion of our business inIndia’s aluminum alloy market which is growing rapidly withthe development of the automobile industry.
In October, the Group established the Changchun Nikkei
Railway Vehicle Equipment Co., Ltd., a local joint venture in
China, as the site for manufacturing and sales of parts fortransport equipment such as trains. The Group will work to
expand our business not only in railway field but in China’stransport-related markets as a whole.

In Japan, as of October 1, 2012, Toyo Aluminium K.K.
and its subsidiaries acquired all outstanding shares of SUNALUMINIUM IND., LTD. (currently Toyo Aluminium ChibaK.K.), an aluminum foil manufacturer. We will enhance
our cost competitiveness in order to come out on top in
global competition, while stepping up production efficiency
and stabilizing supply, in order to reinforce our businesscompetitiveness in the Aluminum Foil segment.

Outlook for Fiscal 2013
With regard to the Japanese economy for fiscal 2013, although
the risk of an economic downturn overseas lingers amid
the European debt crisis and other factors, there is rising
expectation of an economic recovery within Japan in responseto the implementation of proactive monetary easing measuresby the new government administration, along with the
improved export environment following progress in correctionof the strong yen, and rising stock prices.
Demand for aluminum products, which had been on acontinuing downward trend, is expected to increase year
on year due to a recovery in construction and electricalmachinery as well as in exports.
In these circumstances, the next fiscal year is projected toregister net sales of ¥390.0 billion, operating profit of ¥14.5
billion, and ordinary profit of ¥12.0 billion.
The Group has formulated a new three-year Mid-Term
Management Plan starting in the year ended March 31,
2014. We hope to grow as an even stronger corporate groupby taking the transition to a holding company format as anopportunity to strengthen collaboration within the Group andmaximize consolidated revenue.
(Please refer to the special feature starting on page 3 for an
overview of this Mid-Term Management Plan.)
I would like to ask for the continuing support of ourshareholders in these efforts.
June 2013

Takashi Ishiyama
President and CEO
3

Special Feature : The NLM Group’s “New Three-Year Mid-Term Management Plan”

Striving for ¥22.0 Billion in Ordinary Profit through a Matrix ofCommunity and Market Fields
NLM Holdings has established a “New Mid-Term
Management Plan” for the three-year period
beginning in April 2013. This section will examine
the contents of this plan.

conservation of the natural environment.” In the New MidTerm Plan, the Group will strengthen integration between
Group companies through the transition to a holding
company format so as to maximize consolidated revenue,
based on the following basic policies.

Overview of the New Mid-Term Management Plan
(Billions of yen, until otherwise stated)
New Mid-Term
Fiscal 2012 Fiscal 2013
Fiscal 2015
Results
Forecast
Targets

Net sales
Operating profit
Ordinary profit
Net income
Year-end
interest-bearing debt
Net D/E ratio (times)
R O C E (%)

371.9
8.2
6.9
3.4

390
14.5
12
6.5

440
25
22
14

188.8

185

175

1.5
3.7

1.4
5.6

1.1
8.9

Under the New Mid-Term Management Plan (from fiscal
2013 to fiscal 2015, hereinafter referred to as the “New MidTerm Plan”), the Group will strive to increase corporate
value and achieve sustainable profit growth for both theGroup and our shareholders, based on the management
philosophy of “perpetually developing applications foraluminum and aluminum-related materials in order tocontribute to improvements in peoples’ lives and the<Automotive / Transport>
Nippon Light Metal Company, Ltd.
Nikkeikin Aluminium Core Technology Co., Ltd.
Japan
Nippon Fruehauf Co., Ltd.
Nikkeikin Aluminium Core Technology Co., Ltd.

China

ASEAN
Other

Nippon Fruehauf Co., Ltd.
Nikkei Siam Aluminium Limited
Nikkei MC Aluminium Co., Ltd.
Nikkeikin Aluminium Core Technology Co., Ltd.
Nippon Fruehauf Co., Ltd.
Nikkei MC Aluminium Co., Ltd.

Aluminum Sheet andExtrusions
Truck Outfitting

Basic Policies of New Mid-Term Management Plan
❶ Business development through strategies byregion and by sector❷ Creation of growth drivers through new
products and businesses❸ Strengthening of corporate culture
1. Business development through strategies byregion and by sector
Reflecting the increasing diversity of market sectors inJapan, China, Southeast Asia, and other regions, the newplan does not concentrate business resources on specificmarket sectors alone, but instead uses a matrix of regions(domestic and overseas) and market sectors to select fields
into which business resources should be invested in order tomaximize revenue by region and by market sector.
Strengthen materials and components for use in railway cars

Strengthen service operations
Expand sales of automobile components to Western manufacturers
Fabrication of Shaped Parts
Strengthen components for use in railway cars
Truck Outfitting
Expand trailer sales, consider van and truck outfitting
Heat Exchanger Material
Expand sales through collaboration with Japan and China
Secondary Alloy
Enhance competitiveness of Thai site, consider expansion
Fabrication of Shaped Parts Consider creation of new Thai site
Truck Outfitting
Consider creation of new Thai site
Secondary Alloy
Start operations in India, consider creation of new Latin America site

Summary of the Previous Mid-Term Management Plan
The previous Mid-Term Management Plan, from fiscal 2010 to fiscal 2012, considered the three-year period as one of“putting the NLM Group’s new growth strategy into effect.” Numerical targets were not achieved due to the deteriorationin the business environment caused by the Great East Japan Earthquake, the flooding in Thailand, the prolonged European
financial crisis, and worsening relationship between Japan and China, but several of the plan’s measures, such as
accelerating overseas business development and strengthening industry-leading business, were steadily implemented.
In addition, NLM Holdings was established as of October 1, 2012, which prepares the way for further improvements ofcorporate value.
4

< Electrical Machinery and Electronics, Information and Telecommunications>Japan
Toyo Aluminium K.K.
Electrolytic Aluminum Foil
Expand sales of new products
Nikkei Siam Aluminium Limited
Heat Exchangers
Expand sales of room air conditioners
ASEAN Nikkei Heat Exchanger Company, Ltd.
Nikkeikin Aluminium Core Technology Co., Ltd. Fabrication of Shaped Parts Consider creation of new Thai site
Other
Nippon Light Metal Company, Ltd.
Alumina
Expand sales of high value added products (high purity, fine particle)<Environment, Safety, and Energy>
Nippon Light Metal Company, Ltd.
Sheets and Fabrication
Lithium ion battery body materials
Nikkeikin Aluminium Core Technology Co., Ltd.
Nippon Electrode Co., Ltd.
Graphitization Treatment
Lithium ion battery negative electrode materials
Japan
Nikkeikin Aluminium Core Technology Co., Ltd.
Riken Light Metal Industrial Co., Ltd.
Fabrication of Shaped Parts Expand sales of solar panel racks
NLM ECAL Co., Ltd., etc.
NLM ECAL Co., Ltd.
Plant Packages
Expand sales of power conditioner bodies<Food, Health, and Daily Products>
Toyo Aluminium K.K.
Fabricated Foil
Expand sales of packaging for new foods and medical products
Japan
Nikkei Panel System Co., Ltd.
Insulation Panels
Strengthen food processing plants and distribution at low temperature
China
Toyo Aluminium K.K.
Fabricated Foil
Reduce costs and expand sales
ASEAN Nikkei Panel System Co., Ltd.
Insulation Panels
Expand sales of new products tailored to local needs

2. Creation of growth drivers through new
products and businesses
Modern times call for the continual development of new
products and businesses which offer greater added value.

The Group takes a customer-oriented perspective in further
deepening and diversifying development activities throughGroup-wide coordination and creates growth drivers.

Automotive / Transport
Electrical Machinery andElectronics

Nippon Light Metal Company, Ltd.

Information andTelecommunications

Nippon Fruehauf Co., Ltd.

Container data centers

NLM ECAL Co., Ltd.

Modular data centers

Nippon Light Metal Company, Ltd.
Nikkeikin Aluminium Core Technology Co., Ltd.

Lithium ion battery body materials

Nippon Electrode Co., Ltd.

Lithium ion battery negative electrode materials

Nikkeikin Aluminium Core Technology Co., Ltd.
Riken Light Metal Industrial Co., Ltd.
NLM ECAL Co., Ltd., etc.

Solar panel racks(Alsol, Alsol Mega)

Toyo Aluminium K.K.

Water-shedding packaging material (Toyal Lotus)
Medicinal product package (READ-MAX)

Environment, Safety,
and Energy

Food, Health,and Daily Products

Toyo Aluminium K.K.

Aluminum electrical wires for automobiles
Electrolytic Aluminum foil (Toyal Carbo, Toyal Pass, Toyal Titanium), LED
circuits, lithium ion battery exterior foil

3. Strengthening of Corporate Culture
Early recovering of revenue has been a challenge in thefollowing three business sectors, and the Group plans to
restructure their production systems, develop high value
added products, and enhance coordination with overseas
Group companies to rapidly recover revenue.
Alumina

Expand sales of high value added products andreduce costs

Aluminum Sheet

Increase competitiveness through coordination
between Japanese, Chinese, and Thaimanufacturing sites

Electronic Functional Restructure manufacturing and sales systems
Materials
and reduce costs

Takashi Ishiyama,
President and CEO

5

Special Feature

NLM Topics

Expanding into Chinese and ASEAN markets throughthe trilateral structure of Japan, Thailand, and China

Furthermore, by cultivating and effectively utilizing
overseas management personnel, next generation
executives, and other human resources in the Group, we
will further strengthen its corporate culture.
Improvement of Financial Strength and Shareholder
Returns
The Group's basic profit allocation policy is “to enhance its
financial strength and business foundation, while at thesame time taking into consideration the overall
consolidated business results from a medium- to long-term
perspective and paying dividends to shareholders.” In
addition, internal reserves will be used not only as capitalfor reducing interest-bearing debt in order to improve theGroup's financial strength, but will also be invested in
expanding business operations in growth fields, andcreating demand and increasing profitability in corebusiness fields to increase our corporate value.
Under the new Mid-Term Management Plan, the Groupplans to raise dividend payments from the current (as of
the year ended March 31, 2013) ¥3 per share to ¥5 pershare as soon as possible.
The Group will actively and efficiently implement an
action plan based on the above Basic Policies, with theentire Group continuing to work as one in the future toincrease its corporate value.
6❶ The Aluminum Sheet business thus far
The aluminum sheet business is one of the main
business sectors of Nippon Light Metal Holdings
Company, Ltd., and the Group will establish atrilateral supply structure which consists of Japan,
Thailand, and China, with the Group subsidiary
Nippon Light Metal Company, Ltd. (hereinafterreferred to as “Nikkeikin”) at its center. In the past,
Japan (Nikkeikin Nagoya Plant) and Thailand (Nikkei
Siam) have engaged in rolling products business.
The Nagoya Plant’s main products include foil stockand thick plates, and the plant has an annual
production capacity of approximately 100,000 tons.
Nikkei Siam, a wholly-owned subsidiary of Nikkeikin,is the only company which possesses the hot rollingmill in Southeast Asia, and has an annual production
capacity of approximately 40,000 tons. Its main
products include aluminum foil and thin plates foruse in automobile heat exchangers.
❷ Development of Aluminum Sheet business in China
Nikkeikin received third-party share allocations ofHuafon Aluminum Co., Ltd. (hereinafter referred toCompany Overview
Trade name : Huafon Nikkei Aluminum Co., Ltd.
Location : Jinshan District, Shanghai city
President : You Xiaohua
Capital : 0.6 billion yuan
Investment ratio : Huafon Group Co., Ltd. 54.1%: Nippon Light Metal Co., Ltd. 33.4%: Other shareholders 12.5%
Number of employees : 426
Description of business : Manufacturing and sales of rolled
aluminum product

“NLM Promotes the Globalization of Aluminum Sheet Business”

as “Huafon Aluminum”), based in Shanghai, China,
and agreed to acquire 33.4% of the company’s
shares, changing the name of the company to
Huafon Nikkei Aluminum Co., Ltd. (hereinafterreferred to as “Huafon Nikkei Aluminum”) in Marchof this year. In April, following the name change, thecompany was certified by the Shanghai city
authorities as a foreign company, so after theinvestment of additional capital, the company will
become a company accounted for using the equity
method.
Huafon Aluminum is an aluminum rolling company
established by the Huafon Group in 2008. It was
known in China for its superior facilities andpersonnel, and has been recognized as a global
supplier by heat exchanger manufacturers in Korea,
Europe, and the U.S. This additional funding will be
used to pay for the strengthening of installation
capacity which will be necessary in the future,outfitting the company with a system which allows
the company to supply high-quality products at low
cost not only in China but also to Japanesemanufacturers and automobile component
manufacturers in ASEAN countries. By 2016, theGroup plans for the company to have an annual
production volume of 100,000 tons, and net sales of¥31,000 million.

❸ Targeting ASEAN markets
The Group’s investments in Huafon Nikkei Aluminum
will enable the Group’s Aluminum Sheet business topossess three manufacturing sites in Japan (Nagoya
Plant), Thailand (Nikkei Siam), and China (Huafon
Nikkei Aluminum) for the high-demand markets of
ASEAN countries, and will boost expansion ofpresence in the markets while increasing revenue.
❹ Roles of the three manufacturing sites
The Nagoya Plant in Japan aims for expanding
production through its high-mix and small-lot
approach and rapid turn-around capabilities, andfocuses on high value added products made using theGroup's strengths in developing products from raw
materials. At the same time, it will provide support andtransfer of manufacturing technology to the sites inThailand and China, cultivating global humanresources and acting as the Group’s mother factory.
Thailand’s Nikkei Siam will expand its cold rolling
capacity, becoming a core site and supply base for
global customers.
China’s Huafon Nikkei Aluminum will act as asupply base of competitively priced coils used asbase materials for Nikkei Siam, as well as advancing
into the growing Chinese automobile heat exchanger
market and creating new revenue sources.

Nagoya Plant (mother factory)①
Nikkei Siam②③①
Huafon Nikkei Aluminum① Nagoya Plant will act as a center for human resource cultivation, transferring the technologies possessed by the NLM Group② Huafon Nikkei Aluminum will receive various materials from Nagoya Plant and process them to local specifications③ Nikkei Siam will receive aluminum materials (semimanufactured goods) from Huafon Nikkei Aluminum, and will expand its own
production capabilities

7

Corporate Governance and Internal Control Systems

1.

Summary of Corporate Governance

NLM considers the development of a corporate governance system one of its most important management priorities, as this system
helps ensure trust in management by stakeholders, including shareholders, business partners, employees and local communities.
NLM has adopted an executive officer system. The Board of Directors consists of 12 directors, of whom two are outside
directors. This system enables agile management and sufficient deliberation by the Board of Directors. To clarify the roles andresponsibilities of directors and executive officers and ensure that their tasks are conducted appropriately, their term of office
is set to be one year. 12 Board of Directors meetings were held in fiscal 2012.
To examine important matters that affect the entire Group from multiple perspectives, NLM has set up an Executive Committee
under the Board of Directors. This committee consists of the president and CEO, senior executives and executive officers anddirectors of subsidiaries who concurrently serve as NLM directors. The Executive Committee meets at least twice a month.
NLM has also adopted a statutory auditor system. The Board of Statutory Auditors consists of five statutory auditors, ofwhom three are outside auditors. Auditors are independent and play a key role in corporate governance by attending Board of
Directors and other important internal meetings.
Support Systems for Outside Directors and Outside Statutory Auditors
The Planning Department and the Legal Department, which jointly serve as the secretariat for the Board of Directors,
circulate preparatory handouts to directors and auditors. The secretariat also elaborates on issues of particular importanceprior to meetings.
The Auditors Office provides staff to assist the auditors.

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

Audit reports

Appointment / removal

Directors
Outside directors

Audit reports

Board of Directors
Appointment/ removal

Accounting
auditorAppointment / removal

Accounting
audit

President and CEO

Reports andproposals

Operations,subsidiaries and affiliates
Internal
audit
Auditing Office
Audit reports/ Information exchange

8

Audit bystatutory
auditors

Executive Committee
Executive officers

Information exchange

Board of
Statutory
Auditors

Appointment / removal

Subcommittees under the
Executive Committee• Compliance Committee• CSR Committee• Quality Committee• Environment Committee, etc.

Statutory
auditors
Outsideauditors

Information exchange

Accounting Audits
In fiscal 2012, Ernst & Young ShinNihon LLC conducted accounting audits based on the Companies Act and the Financial
Instruments and Exchange Act of Japan.

2.

Summary of Implementation of Internal Control Systems

To fulfill its corporate governance obligations, NLM takes as another management priority the development of internal
control systems for all NLM Group employees. Such systems affect all of NLM’s business processes, ensuring risk management,compliance with laws and ordinances and ongoing work efficiency.
At a meeting on March 14, 2008, the Board of Directors resolved to partially amend the basic policy on the implementationof the Internal Control Systems, in order to achieve the Company’s goals stipulated in the Group management policy. We willcontinue to move forward with the implementation of the systems, while revising the policy as necessary.
Establishment of the Compliance Code and the Internal Whistle-Blower System
In July 2004, NLM established the Compliance Committee, chaired by the president and CEO, to clarify its corporate social
responsibility and to implement effective internal compliance systems. On April 1, 2006, NLM also established the Group
Compliance Code, which is posted on the Group Intranet. At the same time, a leaflet containing this code was distributed to allmembers of Group companies. Concurrently, an internal whistle-blower system was created.
NLM considers important the creation of an atmosphere that fosters the frank exchange of opinions among officers andemployees about workplace compliance and encourages its top-of-mind significance. Each year, NLM holds more than 900
compliance meetings that are attended by employees.
Establishment of Group Risk Management Regulations
As part of its risk management system, in May 2006 NLM established the Group Risk Management Regulations. These
regulations specify departmental responsibilities and risk management guidelines, segmented by risk significance into 1)
product and service defects, 2) environmental problems, 3) disasters (natural and accidental) and 4) information systemproblems.
Establishment of Regulations Concerning the Preservation and Management ofDocuments Containing Important Decisions
In accordance with corporate regulations, NLM appropriately stores and manages information on the execution ofduties by directors, which is disclosed to statutory auditors upon request. On May 29, 2006, NLM established theRegulations Concerning the Preservation and Management of Documents Containing Important Decisions. These
regulations establish criteria for the storage and management of documents at each NLM Group company, including
those concerning Executive Committee decisions, committee minutes and departmental decisions, such as approval
applications, data and addenda.

9

NLM Group Environmental Activities

Basic Principle

The Group shall comply not only with the laws and regulations of the countries and regions in which it operates
but also with relevant international standards and their spirit, doing business in a fair and transparent manner.
The Group's management policies reflect the recognition that initiatives to tackle global environmental issues are vital.

Basic Policy for Environmental Issues

Action Guidelines

Environmental issues are no longer regional issues; they are

1. Compliance with Environmental Laws and Regulations

having a wider impact and carry grave consequences, influencing
our global environment, and even threatening our very existence.
Consequently, national governments, local governments, citizens,and businesses are now expected to make efforts to develop an
environmentally friendly, sustainable, resource-circulating
society. It is with this understanding that Nippon Light Metal
Group proactively seeks to remain in harmony with the

Nippon Light Metal Group complies with environmental laws and regulations

2. Improvement of Energy Efficiency and Reduction of CO2 Emissions
Nippon Light Metal Group strives to improve energy efficiency and reduce
CO2 emissions through improved efficiency of production processes andfacilities, enhanced productivity and streamlining logistics.

3. Reduced Resource Consumption and Promotion of the 3Rs
Nippon Light Metal Group pursues efficient use of all resources used by theGroup, not just aluminum, and promotes the three Rs (Reduce, Reuse, Recycle).

4. Conducting Business with Consideration of Environmental Impact

environment across all of our corporate activities. Harmony withthe environment will lead to protecting the interests ofshareholders, business partners, employees and local
communities, the reason for Nippon Light Metal Group's
existence, and lead to healthy corporate activities. Nippon Light
Metal Group, as a good corporate citizen, endeavors to contributeto the realization of a truly enriched society through ourenvironmental social contributions.

Nippon Light Metal Group conducts scientific assessments of environmental
impact prior to constructing production sites and prior to the developmentof new products. The Group accordingly undertakes measures to conserve
biodiversity. Additionally, in the course of conducting business the Groupmakes every effort to minimize environmental impact.

5. Development of Technologies that Contributed to Environmental
Conservation
Using aluminum's inherent characteristics, Nippon Light Metal Group proactively develops products, processes, and other technologies that have minimal
environmental impact. The Group then discloses and provides the end resultsof this work to society in order to be utilized in environmental conservation.

Voluntary Action Plan for reduction of Greenhouse Gas Emissions / NLM Group
With regard to reduction of greenhouse gas emissions, we have

Changes in Greenhouse Gas Emissions

greatly completed our target of reducing by fiscal 2012 so that

Reference value

the average level from fiscal 2008 to 2012 is reduced by 6%
compared to fiscal 1990 levels.
Reference value

thousand ton-CO2

39.5%
reduction

15%
reduction

For fiscal 2012, the level was 39.5 %( 540 thousand tonsCO2 emissions).
Then, we have set a next target of reducing greenhouse gas
emissions by fiscal 2020 so that the average level from fiscal
2018 to 2022 is reduced by 15% compared to fiscal 2005 levels.

1,367

997

741

871

779

745

1990

2008

2009

2010

2011

2012

827

1,143

972

2008～
2012avg.
-Achivement-

2005

2020
-Target-Fiscal Year10

NLM Group

Nippon Light Metal Group consists of 79 subsidiaries and 21 affiliates (as of March 31, 2013).
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)(Sales and Others)● Nippon Light Metal Company, Ltd.

● Nikkei Sangyo Co., Ltd.

● Aluminium Wire Rod Co., Ltd.

● Tamai Steamship Co., Ltd.

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

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

● Nikkeikin Kakoh Kaihatsu Holdings

Company, Ltd.

● Nikkei Extrusions Co., Ltd.

Aluminum
Sheet andExtrusions● Nikkeikin Aluminium Core Technology Co., Ltd.

● Nikkei Sangyo Co., Ltd.

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

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

● Nikkei Information System Co., Ltd.

● NLM ECAL Co., Ltd.

● Nikkei Logistics Co., Ltd.
● Sumikei Nikkei Engineering Co., Ltd.

● Nikkei Sangyo Co., Ltd.

FabricatedProducts
and Others● Toho Earthtech Inc.

● Nikkei Panel System Co., Ltd.
● Nikkei Matsuo Co., Ltd.
● Nippon Electrode Co., Ltd.
● Nippon Fruehauf 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.
● Tokai Aluminum Foil Co., Ltd.
● Toyal America Inc.
● Toyal Europe S.A.S.U.
● Toyo Aluminium Ekco Products Co., Ltd.
● Toyo Aluminium Chiba K.K.
● Sam-A Aluminium Co., Ltd.

C U S T O M E R● Consolidated subsidiaries: 73 companies● Affiliates accounted for by the equity method: 14 companies(As of March 31, 2013)11

Aluminum Ingot and Chemicals

Review of Operations

Consolidated
Net Sales

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 primary and secondary aluminum alloys and enjoy an excellent reputation forthe development of high-performance alloys in response to customer requirements.
High-purity aluminum manufactured at Japan’s only aluminum smelting
plant is used as a raw material for electronic materials and other products.
■ Net Sales■ Consolidated Operating Profit(Millions Nippon Light Metal Holdings Company, Ltd.
of Yen) Nippon Light Metal Company, Ltd.

(Millions Nippon Light Metal Holdings Company, Ltd.
of Yen) Nippon Light Metal Company, Ltd.

150,000

7,500

120,000

6,000

90,0004,500

60,0003,000

30,000

1,500

0

’10

’11

’12

’13

0

’10

’11

’12

’13

25.3
93,902%Millions of Yen■ Principal Products• Aluminum• Aluminum hydroxide• Chemicals (chemical products)• Caustic soda
• Chlorinated chemical products• Aluminum ingot• Aluminum alloys

Note : Numbers used for the year ended March 2010 have been revised according to the current segment categories.

■ Overview of results for fiscal 2012
In the Alumina and Chemicals segment, with regard to aluminarelated products, sales for the mainstay alumina and aluminumhydroxide products were down due to factors including sluggish
domestic demand and intensifying competition in overseas markets.
As a result, sales fell far below the level of the previous year.
In terms of chemicals, although shipments of caustic soda andinorganic chlorine products were strong, sales of organic chlorine
products declined substantially, causing sales to fall below the level ofthe previous year.
As a result, overall sales for the segment fell far below those of theprevious year. In terms of profits, despite efforts to reduce fixed costs,
the drop in sales volume combined with the impact of rising fuel andelectricity costs led to results significantly below those of the previous year.
The project to switch the raw material used by the Alumina andChemicals segment from bauxite to aluminum hydroxide was

Aluminum Billet

12completed in October 2012. On this new business foundation, we will
work to expand sales of alumina and aluminum hydroxide, and todevelop high value added products.
In the Aluminum Ingot segment, sales of the mainstay secondary
alloy products for automotive applications were robust in Southeast
Asian and North American markets. However, sales volume inJapan, which had been solid during the first half of the year, took adownturn in the latter half due to factors including the end of the“Eco-car” subsidy, resulting in a decrease in sales for the segment
overall compared to the previous year.
In terms of profits, in addition to the fierce price competition with
imported goods caused by the yen appreciation that persisted until theend of last year, the price of raw material scrap also continued to rise.
These and other factors led to results below those of the previous year.
As a result, Alumina, Chemicals and Aluminum Ingot segment
sales decreased 5.7%, or ¥5,658 million year on year, to ¥93,902
million (¥99,560 million for the previous year), while operating profit
decreased 37.4%, or ¥1,954 million year on year, to ¥3,273 million(¥5,227 million for the previous year).
In September 2012, the Group established CMR Nikkei India
Private Ltd., a local joint venture in Haryana Province, India, as thesite for manufacturing and sales of aluminum alloys in northern
India. In addition to expanding our business in India’s aluminumalloy market which is growing rapidly with the development of theautomobile industry, this facility will also function as a supply base ofdevelopment alloys for customers expanding into the area.

Aluminum Sheet and Extrusions

Review of Operations

Consolidated
Net Sales

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.

■ Net Sales■ Consolidated Operating Profit■ Applications(Millions Nippon Light Metal Holdings Company, Ltd.
of Yen) Nippon Light Metal Company, Ltd.

(Millions Nippon Light Metal Holdings Company, Ltd.
of Yen) Nippon Light Metal Company, Ltd.

• Automobile

80,0006,000

60,0003,000

40,0000

20,000
0

’10

’11

’12

’13

-3,000

’10

’11

’12

’13

Note : Numbers used for the year ended March 2010 have been revised according to the current segment categories.

■ Overview of results for fiscal 2012
In the Aluminum Sheet segment, transport-related shipments
increased mainly for van and truck outfitting. However, the slump
in electrical machinery and electronics-related fields was reflected inresults including a significant drop in shipments of thick plates forsemiconductor and LCD manufacturing equipment, and in shipmentsof foil stock for capacitors. Consequently, overall sales volume fell
below that of the previous year. Furthermore, the price of Aluminum
Ingots, which is an indicator in terms of price, stagnated and the unit
selling price dropped, leading to sales levels far below those of theprevious year.

Aluminum Sheet

63,161Millions of Yen

17.0%■ Principal Products• 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
Printingroll • Industrial materials••• Building materials and • Aluminum honeycomb panel • Scaffolding
infrastructure materials • Building materials

In terms of profits, although they improved compared to theprevious year thanks to the effect of fixed cost reductions and otherfactors, the segment did not post a profit mainly because fuel prices
were rising while the unit selling price was falling.
In the Aluminum Extrusions segment, demand related to building
materials was up, and the transport-related shipments for railway
cars were strong, while truck outfitting also performed favorably.
However, electrical machinery and electronics-related fields were
weak, and automobile shipments that had been robust during thefirst half of the year fell dramatically in the latter half amid theadverse effect of worsening relationship between Japan and China.
These and other factors led to sales levels below those of the previous
year for the segment as a whole, and a decline in profits as well.
As a result, Aluminum Sheet and Extrusion segment sales decreased
10.6%, or ¥7,457 million, to ¥63,161 million (¥70,618 million for theprevious year). Operating profit increased 6.8%, or ¥106 million, to¥1,675 million (¥1,569 million for the previous year).
In October 2012, the Group established the Changchun Nikkei
Railway Vehicle Equipment Co., Ltd., a local joint venture, in the Jilin
Province, China, as the site for manufacturing and sales of parts fortransport equipment such as trains. Rapid progress is being made in
the enhancement of China’s railway network amid growing demand
for transportation driven by economic development. We will leverage
our technological superiority in the railway field and work to expand
our business not only in railways but in China’s transport-related
markets as a whole.
13

Fabricated Products and Others

Review of Operations

Consolidated
Net Sales

Profile The NLM Group includes several companies that handle distinctive fabricatedproducts. In particular, Nippon Fruehauf’s truck bodies and Nikkei Panel System’scommercial 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.

126,218
Millions of Yen

33.9%■ Net Sales■ Consolidated Operating Profit■ Applications■ Principal Products(Millions Nippon Light Metal Holdings Company, Ltd.
of Yen) Nippon Light Metal Company, Ltd.

(Millions Nippon Light Metal Holdings Company, Ltd.
of Yen) Nippon Light Metal Company, Ltd.

• Automobile

160,000

8,000

120,000

6,000

80,0004,000

40,0002,000• 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

0

’10

’11

’12

’13

0

• Transport• Electronics• Building materials
and infrastructurematerials

’10

’11

’12

’13

Note : Numbers used for the year ended March 2010 have been revised according to the current segment categories.

■ Overview of results for fiscal 2012
In the Transport-Related segment, sales in the truck outfitting
business exceeded those of the previous year as a result of factors
including a rise in demand for trucks associated with reconstruction
after the earthquake, the impact of the “Eco-car” subsidy program
during the first half of the year, and the emergence of demand
for replacement of vehicles purchased at the time of tightening ofemissions regulations in the latter half of the year.
In the area of capacitors for car air conditioners, demand rosein the first half of the year, and sales were strong for some export
products during the latter half as well. Along with other factors, theseresulted in sales levels exceeding those of the previous year.
The Shaped Parts segment saw robust demand during the firsthalf of the year. In the latter half, however, worsening relationshipbetween Japan and China led to a drop in the number of automobile
units manufactured, which, along with retroaction to the end of the“Eco-car” subsidy, etc., led to sluggish demand and resulted in sales
below those of the previous year.
In the Electronic Materials segment, although demand for anodized
aluminum foil for aluminum electrolytic capacitors is expected to
grow in the future in fields such as renewable energy-related field,
sales continued to be slack for both consumer and manufacturing
equipment against the backdrop of the slowdown in the global
economy, and sales fell far below those of the previous year.
In the Panel System segment, as the pace of new convenience store
openings picked up in response to an expanded customer base due
14• Food and lifestyleto the earthquake, demand for industrial refrigerators and freezers
grew not only for stores, but also for related plants that process foodproducts. In particular, demand for low temperature distribution
warehouses increased considerably, backed by the spread of online
sales and a stronger home delivery business in the restaurant
industry. With regard to clean rooms as well, although demand was
sluggish for semiconductors and precision equipment, an increase indemand in the medical and bio fields led to overall segment sales far
exceeding those of the previous year.
In July 2012, the Group established a heat insulation panel
manufacturing plant in Thailand. This will allow us to use theadvantages of local production to offer quality and stable delivery
times to customers expanding into the area. In addition, the Groupwill leverage the sales network at our local subsidiary in Vietnam
established in October 2011 to expand the business in the Southeast
Asian region, where the market is expected to grow in the future.
In the Carbon Product segment, the slowdown in the economy
overseas led to stagnant sales for the sector’s major products, cathodes
and carbon blocks for blast furnaces and electric furnaces for the steel
and aluminum smelters. However, sales were on par with the levelsof the previous year, mainly due to an increase in sales of unshapedmaterials for electrodes.
As a result, sales in the Fabricated Products and Others segment
decreased 1.4%, or ¥1,754 million, to ¥126,218 million (¥127,972
million for the previous year). Operating profit increased 9.1%, or ¥582
million, to ¥6,974 million (¥6,392 million for the previous year).

Aluminum Foil, Powder and Paste

Review of Operations

Consolidated
Net Sales

Profile The core company in this segment is Toyo Aluminium K.K. Aluminum foils,
powder and paste produced by Toyo Aluminum K.K. have achieved a leading industry
market share and are being used in a wide range of areas, from daily necessities to energy,
electrical and electronics, and automobiles. Expanding into new fields based on our own
technology, we are marketing various kinds and types of materials and products of highfunctionality in both domestic and overseas markets.

■ Net Sales■ Consolidated Operating Profit(Millions Nippon Light Metal Holdings Company, Ltd.
of Yen) Nippon Light Metal Company, Ltd.

(Millions Nippon Light Metal Holdings Company, Ltd.
of Yen) Nippon Light Metal Company, Ltd.

120,000

12,00090,0008,000

60,0004,000

30,000

0

0

’10

’11

’12

’13

-4,000

’10

’11

’12

23.8
%

88,606

Millions of Yen■ Applications■ Principal Products• Food and lifestyle• Electronics• Automobile• Environmental / Energy• Aluminum foil
• Aluminum foil for electrolytic capacitors• Powder and paste• Back sheets for solar cells• Electrode ink for solar cells’13Note : Numbers used for the year ended March 2010 have been revised according to the current segment categories.

■ Overview of results for fiscal 2012
In the Aluminum Foil segment, although new products wereincreasingly adopted for food products and PCs, production
adjustments by customers led to stagnant shipments of high-purity
aluminum foil for electrolytic capacitors. Sales of standard foil, suchas plain foil for lithium ion battery surfaces grew during the firsthalf of the year, but stalled in the latter half. This and other factors
resulted in overall sales for the sector falling below those of theprevious year.
In the Paste segment, shipments were robust for inks used for foodand beverage containers and for pigments used in newly-introduced
cosmetics. With regard to mainstay aluminum paste for use inautomobile paint, shipments of high-bright products and glass flakesrose in spite of sluggish domestic demand, and exports to North
America also performed favorably. As a result, sales exceeded thosefor the previous year.

Aluminum Foil

In the Electronic Functional Materials segment, the businessenvironment was even harsher than the previous year with regard
to sales of mainstay back-sheets and functional ink for solar cells,
amid a continuing decline in solar panel production volume in themain producing areas of China and Taiwan caused by shrinkage
in our principal European markets for solar cell-related products.
Consequently, overall sales for the sector fell far below those of
the previous year despite increased shipments for other functional
materials such as powder products and circuit products.
As a result, sales in the Aluminum Foil, Powder and Paste segment
decreased 15.5%, or ¥16,253 million, to ¥88,606 million (¥104,859
million for the previous year.) Operating profit and loss decreased by¥4,173 million to a loss of ¥771 million (¥3,402 million in profit forthe previous year), reflecting harsh business conditions particularlyin the Electronic Functional Materials segment due to a dramatic
drop in the selling price for solar cell-related products triggeredby oversupply, as well as a sizable loss posted following disposal of
inventory due to a shift in market trends.
As of October 1, 2012, Toyo Aluminium K.K. and its subsidiaries
acquired all outstanding shares of SUN-ALUMINIUM IND., LTD.
(currently Toyo Aluminium Chiba K.K.), an aluminum foil
manufacturer. By making Toyo Aluminium K.K. a subsidiary, we will
work to enhance our cost competitiveness in order to come out on top
in global competition, while stepping up production efficiency andstabilizing supply, in order to reinforce our business competitivenessin the Aluminum Foil Segment.
15

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

Nippon Light Metal Company, Ltd.

Gross Profit and Gross Profit Margin
Nippon Light Metal Holdings Company, Ltd.
150,000(Millions of yen)
20

90,00015

60,00010

30,000

5

2008
2009
2010
Gross Profit
Gross Profit Margin

2011

2012

2013

0

Years ended March 31

Millions of yen

Interest-bearing Debt
Nippon Light Metal Holdings Company, Ltd.
300,000

Nippon Light Metal Company, Ltd.

250,000

200,000

150,000

100,000

50,000

0

2008

2009

2010

2011

2012

2013

Years ended March 31

Millions of yen

Free Cash Flows
Nippon Light Metal Holdings Company, Ltd.
28,000

Nippon Light Metal Company, Ltd.

24,00020,00016,00012,000

8,000

4,000

0

2008

Millions of yen

16

2009

25

120,000

0

2008

%

Nippon Light Metal Company, Ltd.

2009

2010

2011

2012

2013

Years ended March 31

Financial Results
Net Sales..................................................................................................
Gross Profit.............................................................................................
Gross Profit Margin (%).........................................................................
Operating Profit (Loss)...........................................................................
Ordinary Profit (Loss)............................................................................
Net Income (Loss)...................................................................................
Segment Information
Net Sales:
Aluminum Ingot and Chemicals......................................................
Aluminum Sheet and Extrusions.....................................................
Fabricated Products and Others.......................................................
Building Materials.............................................................................
Aluminum foil, powder and paste....................................................
Total...................................................................................................
Operating Profit (Loss):
Aluminum Ingot and Chemicals......................................................
Aluminum Sheet and Extrusions.....................................................
Fabricated Products and Others.......................................................
Building Materials.............................................................................
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)..................
Minority interests in consolidated Subsidiaries (Note 3)......................
Interest-bearing Debt (Note 2)...............................................................
Cash Flows
Cash Flows from Operating Activities.....................................................
Depreciation and Amortization........................................................
Cash Flows from Investing Activities......................................................
Capital Expenditures.........................................................................
Cash Flows from Financing Activities....................................................
Per Share Data (yen and dollars)
Net Income (Loss) - basic.......................................................................
- diluted.....................................................................
Net Assets (Note 3)..................................................................................
Cash Dividends........................................................................................
Indices
Return on Capital Employed (ROCE)(%).....................................................
Return on Equity (ROE)(%)..................................................................
Equity Ratio (%).....................................................................................
OthersNumber of Shares Outstanding (thousands)...................................................
R&D Expenditures..................................................................................
Number of Employees.............................................................................

¥647,846
108,946
16.8
17,998
11,222(10,310)¥554,094
76,72013.8(11,892)(16,936)(31,442)

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

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

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

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

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

25,018
20,160(25,051)
25,263(9,028)26,674
22,113(22,086)
24,9976,422¥(19.00)—
223.613.0¥(57.77)—
154.22
—

4.5
(7.9)
22.5

(4.1)
(30.6)
17.5

545,126¥5,858
14,084545,126
5,972
13,678Note 1: U.S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥94.05 =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: Effective the year ended March 31, 2007, the Company adopted the new accounting standard“Accounting Standard for Presentation of Net Assets in the Balance Sheet”.
Note 4: Numbers used for the year ended March 2010 have been revised according to the current segmentcategories.

Nippon Light Metal Holdings Company, Ltd.

Nippon Light Metal Company, Ltd.
2010

2011

2012

2013

Return on Capital Employed (ROCE)
Nippon Light Metal Holdings Company, Ltd.

2013
(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)

¥460,681
81,885
17.8
7,673
2,682
2,084

¥429,433
78,16618.2
24,724
18,52911,040¥403,009
67,55916.8
13,6659,709
2,856¥371,887
62,715
16.9
8,154
6,873
3,355

$3,954,141
666,826
16.9
86,69873,07635,672

88,141
58,399106,060
115,680
92,401
460,681

107,397
69,458136,095—
116,483
429,433

99,56070,618
127,972—
104,859
403,00993,902
63,161
126,218—
88,606
371,887

998,426
671,568
1,342,031—
942,116
3,954,141

3,425
(362)
3,849
(1,776)5,140(2,603)
7,673

6,783
4,604
5,738
—
10,245(2,646)
24,724

5,227
1,569
6,392
—
3,402
(2,925)
13,665

3,273
1,675
6,974
—
(771)
(2,997)8,154

34,801
17,81074,152—(8,198)(31,867)
86,698258,839
165,612
5,147
51,424249,184
138,714
87,245
1,507
4,372
221,720

221,956
143,767
4,458
44,704
182,703
127,425
98,272
463
6,022
190,760

225,200
149,919
6,601
40,951
192,070
121,752
100,033
434
8,382
187,697

217,648
153,238
6,338
42,562
182,173
122,989
102,297
2,851
9,476
188,8442,314,172
1,629,325
67,390452,547
1,936,979
1,307,699
1,087,687
30,314
100,755
2,007,910

26,38820,717(15,792)
14,197(8,880)26,47915,831964
15,363(30,726)

19,537
17,040(18,289)
23,167(6,915)18,030
16,259(14,025)
17,121(5,175)

191,707
172,876(149,123)
182,041(55,024)

9

6

3

0

-3

-6

¥20.29—181.512.00¥5.25—184.71
2.00¥6.17—193.333.00$0.07
—
2.06
0.03

2.2
2.4
18.5

7.9
11.8
23.8

4.9
2.9
23.8

3.7
3.3
25.0

3.7
3.3
25.0

545,126
5,085
12,854545,126
4,798
9,739

545,126
4,902
10,041

545,126
5,063
10,392545,126$53,833
10,392

2008

2009

2010

2011

2012

2013

Years ended March 31%

Return on Equity (ROE)
Nippon Light Metal Holdings Company, Ltd.
20

Nippon Light Metal Company, Ltd.

10

0

-10

-20

-30

-40

2008

2009

2010

2011

2012

2013

Years ended March 31%

R&D Expenditures
Nippon Light Metal Holdings Company, Ltd.
7,000

¥3.83
3.63
163.13—

Nippon Light Metal Company, Ltd.

Nippon Light Metal Company, Ltd.

6,000

5,000

4,000

3,000

2,000

1,000

0

2008

Millions of yen

2009

2010

2011

2012

2013

Years ended March 31

17

Financial Review

NLM Holdings was established on October 1, 2012, through asole-share transfer by NLM as a holding company presiding
over the entire Group. The first fiscal year for NLM Holdings isfrom October 1, 2012 to March 31, 2013; however, the fiscal
year under review is from April 1, 2012 to March 31, 2013,
because the consolidated financial statements have been
prepared by inheriting those of NLM.
Furthermore, since shares were transferred through the soleshare transfer method, there is no real change in the scope of
consolidation from that under NLM. Therefore, comparisonswith the consolidated results for the year ended March 31, 2012
for NLM have been included as a reference for year-on-yearcomparison.

stagnated. Shipments of metal products such as foil stock continued
to flag.
Given these circumstances, the Group worked to further strengthen
the revenue base and to increase its competitiveness based on thepolicies laid out in the Mid-Term Management Plan (from fiscal 2010
to fiscal 2012), a three-year plan of which the fiscal year under review
is the final year.
That is, the Group vigorously engaged in making existing products
high-value added and launching new products by pressing ahead withfusion and deep cultivation of the technologies built up at each Group
company. Furthermore, in order to respond to technical innovation by
our customers, each segment steadily carried out collaborative
research and development activities.

Overview
The Japanese economy during fiscal 2012 (the year ended March 31,2013) saw an increase in public investment accompanied by signs ofrecovery in personal spending. However, the impact of sluggish growthin the economies of emerging nations and deteriorating relations
between Japan and China led to a decline in exports, which, coupledwith a drop of capital investment mainly in the manufacturingindustry, meant that conditions continued to be severe.
With regards to domestic demand for aluminum, the demandsituation varied from field to field. Shipments of transport-related
products such as automobiles and of construction-related productsrose, but shipments of electrical and electronics-related products

Overview of Consolidated Business Performance

Net Sales By Segment

700

Changes in
Comparison(Reference)(Decrease in brackets)
NLM
NLM Holdings
Changes
The year ended The year ended
March 31, 2013 March 31, 2012 [Percent changes]

371,887

403,009(31,122)[(7.7)%]

Operating profit

Net sales

8,154

13,665(5,511)[(40.3)%]

Ordinary profit

6,873

9,709

(2,836)[(29.2)%]

Net income

3,355

2,856

499[17.6%]

Net income per share(Yen)

6.17

5.25

0.92[17.5%]

In addition, the Group established a new company, a local joint
venture in China where the railway network is undergoing

Total Net Assets

Equity Ratio

Nippon Light Metal Holdings Company, Ltd.

Nippon Light Metal Holdings Company, Ltd.

Nippon Light Metal Company, Ltd.

Nippon Light Metal Company, Ltd.

150

(Millions of yen)

Nippon Light Metal Holdings Company, Ltd.

25

Nippon Light Metal Company, Ltd.

600
120

20

90

15

60

10

30

5

500
400
300
200
100
0

2009

Billions of yen

2010

2011

2012

2013

Years ended March 31

0

2009

Billions of yen

2010

2011

2012

0

2013

As of March 31

%

2009

2010

2011

2012

2013

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.

18

development, for manufacturing and sale of railway-related parts. In
India, where demand expansion is anticipated, the Group also launched
an aluminum alloy business with a local company. In this way, by
deploying our domestically superior business model overseas, we
implemented measures to solidify the Group’s advantageous position.
Furthermore, we took multiple steps to enhance the revenue structure
for the Group as a whole, such as implementing measures ofthoroughgoing cost reduction and expansion of sales volume.
Earnings and Expenses
However, flagging sales of solar cell-related products and alumina
and chemicals related products made a large impact, and as a result,
NLM Holdings’ consolidated net sales for the fiscal year under review
decreased 7.7% year on year to ¥371.9 billion ($3,954 million). For
sales and other financial performance by business segment, please see
the Review of Operation in pages 12 to 15.
The cost of sales was ¥309.2 billion ($3,287 million), while the costto sales ratio was 83.1%. Selling, general and administrative expenses
was ¥54.6 billion ($580 million). As a result, operating profit
decreased 40.3% year on year to ¥8.2 billion ($87 million).
Non-operating income was ¥4.0 billion ($43 million). During the
fiscal year under review, technical support fee and foreign exchange
gains were recorded as income. Non-operating expenses were ¥5.3
billion ($56 million). As a result, ordinary profit decreased 29.2% year
on year to ¥6.9 billion ($73 million).
For special gains, ¥6.3 billion ($67 million) was recorded as gainon sales of fixed assets. This was a result of selling land. As for special
losses, a loss on impairment of fixed assets was recorded for bauxite
equipment that became unused following the change in the
manufacturing process.
As a result, income before income taxes and minority interests of¥9.4 billion ($100 million) was recorded for the fiscal year underreview. Corporate, inhabitant and business taxes amounted to ¥2.6
billion ($28 million), and deferred income taxes during the fiscal
year under review were ¥2.4 billion ($25 million).
Overview of Consolidated Balance Sheets
NLM Holdings
March 31, 2013

(Reference)
NLM
March 31, 2012

(Millions of yen)(%)
Changes incomparison(Decrease in brackets)

Total assets

419,786

422,671(2,885)

Total liabilities

305,162

313,822(8,660)Total net assets

114,624

108,849

5,775

Equity ratio (%)

25.0

23.8

1.2

As a result of the above, net income in the fiscal year under review
increased 17.5% year on year to ¥3.4 billion ($36 million). The
average number of shares outstanding decreased from 543,934
thousand shares in the previous year to 543,889 thousand shares in
the fiscal year under review. Therefore, net income per share

increased from ¥5.3 in the previous year to ¥6.2 ($0.07) in the fiscal
year under review. Payment of annual cash dividend of ¥3.0 ($0.03)
per share was approved by the resolution at the General Meeting of
Shareholders held on June 27, 2013.
Assets, Liabilities and Shareholders’ Equity
Total assets as of March 31, 2013 decreased ¥2.9 billion year on yearto ¥419.8 billion ($4,463 million). Total liabilities decreased ¥8.7
billion year on year to ¥305.2 billion ($3,245 million). Interestbearing debt increased ¥1.1 billion year on year to ¥188.8 billion.
Total net assets increased ¥5.8 billion year on year to ¥114.6 billion($1,219 million), thanks primarily to an increase in retained
earnings due to the recording of net income in the fiscal year underreview. Net assets per share as of March 31, 2013 increased ¥8.62 year
on year to ¥193.33 ($18,182.69), while the equity ratio improved 1.2
percentage point year on year to 25.0%.
Cash Flows
Cash and cash equivalents on a consolidated basis as of March 31, 2013
decreased ¥0.5 billion year on year to ¥36.0 billion ($383 million).
Net cash provided by operating activities was ¥18.0 billion ($192
million). This was primarily due to items such as income before
income taxes and minority interests, and depreciation andamortization.
In the fiscal year under review, ¥14.0 billion ($149 million) net
cash was used in investing activities. This was primarily due topayments for purchases of fixed assets. Net cash used in financing
activities was ¥5.2 billion ($55 million).
Outlook for Fiscal 2013
With regard to the Japanese economy for fiscal 2013, although therisk of an economic downturn overseas lingers amid the European
debt crisis and other factors, there is rising expectation of an
economic recovery within Japan in response to the implementation ofproactive monetary easing measures by the new government
administration, along with the improved export environment
following progress in correction of the strong yen, and rising stock
prices.
Regarding demand for aluminum products, which had been on acontinuing downward trend, recovery is forecast in construction andelectrical machinery as well as in exports.
With the formulation of its three-year Mid-Term Management Plan
starting in the year ending March 31, 2014, the Group hopes to growas an even stronger corporate group by taking the opportunity of thetransition to a holding company. For the year ending March 31, 2014,
we expect net sales of ¥390.0 billion, operating profit of ¥14.5 billion,
ordinary profit of ¥12.0 billion, and net income of ¥6.5 billion. Net
income per share is predicted to be ¥11.95, while cash dividends per
share are predicted to be ¥4.0.
19

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

March 31,

Assets2013

2013(Millions of yen)(Thousands of
U.S. dollars) (Note 2)

Current assets:
Cash and deposits (Note 3) Notes and accounts receivable – trade 
Finished products Work-in-progress, including costs related to construction-type contracts 
Raw material and supplies Deferred tax assets (Note 9) 
Other current assets Allowance for doubtful accounts 
Total current assets ¥36,027
114,906
22,114
15,202
17,516
4,312
8,884(1,313)
217,648$383,062
1,221,754
235,130
161,637
186,241
45,84894,461(13,961)
2,314,172

Property, plant and equipment (Note 5):
Land 
Buildings and structures 
Machinery and equipment 
Tools, furniture and fixtures Construction-in-progress 
Accumulated depreciation 
Total property, plant and equipment 54,610126,061
254,487
28,3333,934(314,187)
153,238

580,649
1,340,362
2,705,869
301,255
41,829(3,340,639)
1,629,325

Intangible assets:
Goodwill 
Other intangible assets (Note 5) 
Total intangible assets 

1,944
4,394
6,338

20,67046,72067,390Investments and other assets:
Investment securities (Notes 4 and 5) Deferred tax assets (Note 9) 
Other assets Allowance for doubtful accounts 
Total investments and other assets 

26,36911,3855,262(454)
42,562

280,372
121,053
55,949(4,827)452,547¥419,786$4,463,434

Total assets 20March 31,

Liabilities and net assets
Current liabilities:
Short-term borrowings (Note 5) Current portion of long-term debt (Note 5) Notes and accounts payable – trade 
Income taxes payable 
Other current liabilities (Note 5) 
Total current liabilities Long-term liabilities:
Long-term debt (Note 5) Accrued pension and severance costs (Note 8) 
Deferred tax liabilities on land revaluation surplus (Notes 9 and 11) 
Other long-term liabilities (Notes 5 and 9) 
Total long-term liabilities 
Total liabilities 
Net assets :Shareholders’ equity:
Common stock:
Authorized: 2,000,000,000 shares
Issued: 545,126,049 shares 
Additional paid-in capital Retained earnings Treasury stock, at cost (1,247,069 shares in 2013) 
Total shareholders’ equity Accumulated other comprehensive income:Net unrealized gains on securities (Note 4) Net unrealized gains on hedges (Note 1(m)) 
Revaluation surplus (Note 11) 
Foreign currency translation adjustments 
Total accumulated other comprehensive income 
Minority interests in consolidated subsidiaries 
Total net assets Contingent liabilities (Note 14)
Total liabilities and net assets 

2013

2013

(Millions of yen)(Thousands of
U.S. dollars) (Note 2)¥64,689
25,251
62,266
1,802
28,165
182,173$687,815
268,485
662,052
19,160299,467
1,936,979

103,943
16,981452
1,613
122,989
305,162

1,105,189
180,553
4,806
17,151
1,307,699
3,244,678

39,085
11,17952,137(104)
102,297

415,577
118,862554,354(1,106)
1,087,687

1,504
(23)
145
1,225
2,851
9,476
114,624

15,992(245)
1,542
13,02530,314
100,755
1,218,756¥419,786$4,463,434

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

21

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

Year ended March 31,

Net sales 
Cost of sales (Note 13) 
Gross profit 
Selling, general and administrative expenses (Note 13) 
Operating profit 
Non-operating income:Interest income Dividend income Equity in earnings of affiliates Foreign exchange gains 
Rental income Technical support fee 
Other Total non-operating income Non-operating expenses:
Interest expense 
Other Total non-operating expenses 
Ordinary profit Special gains:
Gain on sales of fixed assets 
Total special gains Special losses:
Environmental expenses 
Loss on impairment of fixed assets (Note 15): 
Loss on corrective measures for product defects 
Total special losses 
Income before income taxes and minority interests 
Income taxes (Note 9):
Current Deferred 
Income before minority interests 
Minority interests in net income of consolidated subsidiaries 
Net income Per share of common stock (Note 16):
Net income Cash dividends 
The accompanying notes are an integral part of these financial statements.

22

2013

2013

(Millions of yen)(Thousands of
U.S. dollars) (Note 2)¥371,887
309,172
62,71554,561
8,154$3,954,141
3,287,315
666,826
580,128
86,698

69
257
489
861
730
446
1,170
4,022

734
2,733
5,199
9,155
7,762
4,742
12,43842,763

2,881
2,422
5,303
6,873

30,63325,752
56,38573,076

6,274
6,274

66,70966,709

2,060
1,319
326
3,705
9,442

21,903
14,024
3,466
39,393
100,392

2,642
2,368
5,010
4,432
1,077
¥3,355

28,091
25,17853,26947,123
11,451$35,672(Yen)¥6.17
3.00(U.S. dollars)(Note 2)

$0.070.03

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

Year ended March 31,
2013

2013

(Millions of yen)(Thousands of
U.S. dollars) (Note 2)¥4,432$47,123

Net unrealized gains on securities 

350

3,721

Net unrealized losses on hedges 

(26)

(276)

Foreign currency translation adjustments 

1,899

20,191Equity of other comprehensive income of affiliates 

572

6,082

Total other comprehensive income (Note 7) 

2,795

29,718¥7,227$76,841

Shareholders of the parent ¥5,772$61,371

Minority interests 

1,455

15,470¥7,227$76,841

Income before minority interests 
Other comprehensive income

Comprehensive income Attributable to:

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

23

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

2013
Shareholders’ equity

Balance at April 1,2012 
Net income Cash dividends 
Disposal of treasury stock 
Net increase in treasury stock 
Net unrealized gains on
securities (Note 4) Net unrealized losses on hedges 
Foreign currency translation
adjustments 
Net increase in minority interests
in consolidated subsidiaries 
Balance at March 31, 2013 

Commonstock

Additional
paid-in
capital¥39,085¥11,179

Retainedearnings¥49,968
3,355(1,088)(98)

Treasurystock,
at cost¥(199)

Accumulated other comprehensive income
Minority
Net
Net
Foreignunrealized unrealized Revaluation currency interests ingains ongains onsurplustranslation consolidated Total net
assetssecurities
hedges(Note 11) adjustments subsidiaries(Millions of yen)

¥1,092¥11,179¥52,137¥145¥(806)

98(3)
412¥39,085¥3¥(104)¥1,504

412
(26)

(26)

¥(23)

¥8,382 ¥108,849
3,355(1,088)
—
(3)

¥145

2,031

2,031

¥1,225

1,094
1,094¥9,476 ¥114,624

2013
Shareholders’ equity
Commonstock

Balance at April 1,2012 
Net income Cash dividends 
Disposal of treasury stock 
Net increase in treasury stock 
Net unrealized gains on
securities (Note 4) Net unrealized losses on hedges 
Foreign currency translation
adjustments 
Net increase in minority interests
in consolidated subsidiaries 
Balance at March 31, 2013 

Additional
paid-in
capitalRetainedearnings$415,577 $118,862 $531,292
35,672(11,568)(1,042)$(2,116) $11,611$ 32$1,542

1,042(32)$ (8,570) $ 89,123 $1,157,353
35,672(11,568)
—
(32)

4,381

4,381
(277)

(277)
21,595$415,577 $118,862 $554,354

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

24

Accumulated other comprehensive income
Minority
Net
Net
Foreign
Treasury
unrealized unrealized Revaluation currency interests in
Total
stock,
gains ongains onsurplustranslation consolidated
at costsecurities
hedges(Note 11) adjustments subsidiaries net assets(Thousands of U.S. dollars) (Note 2)$(1,106)$15,992$(245)$1,542

21,595

11,632
11,632$13,025 $100,755 $1,218,756

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

Year ended March 31,

Cash flows from operating activities
Income before income taxes and minority interests 
Depreciation and amortization 
Loss on impairment of fixed assets Gain on sales of fixed assets 
Increase in allowance for doubtful accounts 
Decrease in accrued pension and severance costs Interest and dividend income Interest expense 
Equity in earnings of affiliates 
Decrease in notes and accounts receivable – trade 
Decrease in inventories 
Decrease in notes and accounts payable – trade 
Other Subtotal Interest and dividend income received Interest paid 
Income taxes paid 
Net cash provided by operating activities 
Cash flows from investing activities
Payments into time deposits Proceeds from withdrawal of time deposits 
Payments for purchases of fixed assets Proceeds from sales of fixed assets 
Payments for purchases of investment securities Proceeds from sales of investment securities Payments of loans receivable Collection of loans receivable 
Purchase of subsidiaries’ share resulting in change in scope of consolidation 
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 
Redemption of bonds Proceeds from sale and lease-back transactions 
Cash dividends paid 
Cash dividends paid to minority interests 
Other Net cash used in financing activities 
Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the year 
Cash and cash equivalents at end of year (Note 3) 

2013

2013

(Millions of yen)(Thousands of
U.S. dollars) (Note 2)¥9,442
16,2591,319(6,274)
11
(622)
(326)
2,881
(489)
6,603
3,612
(9,357)320
23,379567(2,903)(3,013)18,030$100,392
172,876
14,024(66,709)117(6,614)(3,466)30,633(5,199)70,20738,405(99,490)
3,405
248,5816,029(30,867)(32,036)
191,707(70)
119(18,297)
6,426
(572)
74
(39)
34
90
(1,790)(14,025)

(744)
1,265
(194,545)
68,325(6,082)
787
(415)
362
957
(19,033)(149,123)(3,364)24,356(23,953)(1,128)1,569(1,085)(280)(1,290)(5,175)678(492)
36,454¥35,962(35,768)
258,969(254,684)(11,994)
16,683(11,536)(2,977)(13,717)(55,024)
7,209(5,231)
387,602$382,371

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

25

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 as to 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.
The difference between the cost and the underlying net assets of investments in consolidated subsidiaries or affiliates accounted for by theequity method has been allocated to identifiable assets based on fair value at the respective dates of acquisition. Any unassigned residual amount isrecognized as goodwill and amortized by the straight-line method over an estimated useful life, with the exception of minor amounts which arecharged to income in the year of acquisition.
(c) Translation of foreign currencies
All monetary assets and liabilities denominated in foreign currencies, whether long-term or short-term, are translated into Japanese yen at theexchange rates prevailing at the balance sheet date. The resulting gains and losses are included in net loss for the year.
Assets and liabilities of foreign subsidiaries and affiliates are translated into Japanese yen at the exchange rates prevailing at the balance sheet
date. Income statement accounts for the year are translated into Japanese yen using the average exchange rates during the year. The resulting
translation adjustments are accounted for as foreign currency translation adjustments, except for the minority interest portion which is allocatedto minority interests in consolidated subsidiaries.
(d) Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows comprise of cash in hand, bank deposits available for withdrawal on
demand and short-term investments with an original maturity of three months or less and which are exposed to a minor risk of fluctuation invalue.
(e) Inventories
Inventories are principally stated at cost, determined by the moving average method, except that the specific identification method is applied tocosts related to construction-type contracts. In addition, the amount of Balance Sheet is calculated by write-down method based on descent of
profitability.
(f) Investment securities
Securities other than equity securities issued by subsidiaries and affiliates are classified into held-to-maturity securities or available-for-salesecurities.
Held-to-maturity securities are stated at amortized cost. Available-for-sale securities for which market quotations are available are stated at fairvalue with net unrealized gains or losses being included in net assets, net of the related taxes. Available-for-sale securities for which market
quotations are not available are stated at cost. Realized gains and losses on sales are determined using the average cost method and are included
in net income for the year.
In cases where the fair value of held-to-maturity securities or available-for-sale securities has declined significantly and such impairment isother than temporary, such securities are written down to fair value and the resulting losses are charged to income for the year.

26

(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 and depreciation
Property, plant and equipment are stated at cost. Depreciation is computed principally using the straight-line method at rates based on theestimated useful lives of the respective assets, ranging from 2 years to 60 years for buildings and structures, and from 2 years to 22 years formachinery and equipment.
(i) Intangible assets
Intangible assets are amortized by the straight-line method over their respective estimated useful lives. Expenditure relating to computer softwaredeveloped for internal use is charged to income as incurred, except in cases where it contributes to the generation of income or future cost savings.
In these cases, it is capitalized and amortized using the straight-line method over its estimated useful life, which is no longer than 5 years.
(j) Accrued pension and severance costs
Accrued pension and severance costs for employees represent the projected benefit obligation in excess of the fair value of the plan assets, except forunrecognized transition obligation and unrecognized actuarial gain or loss. Prior service cost is being amortized as incurred mainly by thestraight-line method over the period of 15 years which is shorter than the average remaining number of years of service of the 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, except for unrecognized costs with respect to employees who retired under the early retirement program which were fully amortized at thetime of the employees’ retirement.
(k) Lease transactions
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 income for the year in which they arise, except for derivatives
designated as hedging instruments.
The Company and its consolidated subsidiaries use derivatives to reduce their exposure to fluctuation in foreign exchange rates, interest rates,
and the prices of aluminum ingot in the market. Derivatives designated as hedging instruments are principally forward foreign exchange
contracts, interest rate swap contracts and aluminum ingot forward contracts. The underlying hedged items are trade accounts receivable andpayable, long-term bank loans and sales or purchases of aluminum ingot.
Gains and losses arising from changes in fair value of derivatives designated as hedging instruments are deferred and included in net incomein the same period in which the corresponding gains and losses on the underlying hedged items or transactions are recognized. The Company andits consolidated subsidiaries use interest rate swaps to hedge their interest rate risk exposure. The related interest differentials paid or received under
the interest rate swap agreements are recognized in interest expense over the term of the agreements.
The Company and its consolidated subsidiaries evaluate the effectiveness of their hedging activities by reference to the accumulated gains orlosses on the hedging instruments and the underlying hedged items from the commencement of the hedges.

27

Notes To Consolidated Financial Statements(n) Research and development costs
Research and development costs are charged to income as incurred.
(o) Appropriation of retained earnings
Appropriation of retained earnings is reflected in the consolidated financial statements for the year in which the appropriation is approved at an
ordinary general meeting of shareholders.
The Company’s retained earnings consist of unappropriated retained earnings and a legal reserve as required by the Corporation Law of Japan.
The Corporation Law provides that an amount equal to 10% of distributions from unappropriated retained earnings paid by the Company and its
Japanese subsidiaries be appropriated to the legal reserve. Such appropriations are no longer required when the total amount of additional paid-in
capital and the legal reserve equals 25% of their respective stated capital.
Under the Corporation Law, the Company is permitted to transfer to unappropriated retained earnings the portion of its statutory reserve(additional paid-in capital and the legal reserve) in excess of 25% of common stock upon approval at a shareholders’ meeting. Any suchtransferred portion is available for dividend distribution.
(p) Net income per share
Basic net income per share of common stock, presented in the accompanying consolidated statements of income, is computed based on theweighted average number of shares outstanding during each year.
Diluted net income per share reflects the potential dilution that could occur if securities were converted into common stock. Diluted net
income per share of common stock assumes full conversion of the outstanding convertible bonds at the time of issuance with an applicableadjustment for the related interest expense on a net of tax basis.
(q) Reclassifications
Certain reclassifications of previously reported amounts have been made to conform them to the current year’s classifications.
(r) Accounting standards issued but not yet effective
On May 17, 2012, the Accounting Standard Board of Japan (the “ASBJ”) issued ASBJ Statement No. 26, “Accounting Standard for Retirement
Benefits” and ASBJ Guidance No. 25, “Guidance on Accounting Standard for Retirement Benefits.” Major changes are as follows:
1.Outline of this revised accounting standard
1)Treatment in the consolidated balance sheet
Actuarial gains and losses and past service costs that are yet to be recognized in profit or loss shall be recognized within net assets(accumulated other comprehensive income), after adjusting for tax effects, and the deficit or surplus shall be recognized as a liability or asset.
2)Treatment in the consolidated statement of income and the statements of comprehensive income
Actuarial gains and losses and past service costs that arose in the current period and are yet to be recognized in profit or loss shall be
included in other comprehensive income and actuarial gains and losses and past service costs that were recognized in other comprehensive
income in prior periods and then recognized in profit or loss in the current period shall be treated as reclassification adjustments.
2.Effective date
The Company expects to apply the revised accounting standard from the end of the fiscal year ending March 31, 2014. However, the amendment
relating to determination of retirement benefit obligations and current service costs will be applied from the beginning of the fiscal year ending
March 31, 2015. In addition, no retrospective application of this accounting standard to consolidated financial statements in prior periods isrequired.
3.The effect of application of this revised accounting standard
The effect of application of this revised accounting standard is now under assessment at the time of preparation of the accompanying consolidated
financial statements.
Effand translation adjustments” under the previous method.

28

2. U.S. Dollar Amounts
The rate of ¥94.05 = U.S.$1, the approximate exchange rate prevailing at March 31, 2013, has been used for the purpose of presenting the U.S.
dollar amounts in the accompanying consolidated financial statements. These amounts are included solely for the convenience of the reader.
Accordingly, they should not be construed as representations that yen amounts actually represent, or have been or could be readily converted,
realized or settled in U.S. dollars at that rate.
3. Cash and Cash Equivalents
A reconciliation of cash and cash equivalents in the accompanying consolidated statements of cash flows to cash and deposits disclosed in theaccompanying consolidated balance sheets at March 31, 2013 is summarized as follows:

Cash and deposits Time deposits with maturities in excess of 3 months 
Cash and cash equivalents 

2013

2013

(Millions of yen)(Thousands of
U.S. dollars)¥36,027(65)¥35,962$383,062(691)$382,371

4. Investment Securities(a) Available-for-sale securities with available market quotations
The aggregate cost, carrying amount and gross unrealized gains and losses of available-for-sale securities comprising equity securities withavailable market quotations at March 31, 2013 was as follows:

Cost 
Unrealized gains 
Unrealized losses 
Carrying amount 

2013

2013

(Millions of yen)(Thousands of
U.S. dollars)¥2,992
2,182(133)¥5,041$31,813
23,200(1,414)$53,599(b) Sales of available-for-sale securities
The realized gains on sales of available-for-sale securities for the year ended March 31, 2013 was as follows:

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

2013

2013

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

¥74
9
15

$787
96
159

29

Notes To Consolidated Financial Statements

5. Short-Term Borrowings and Long-Term Debt
Short-term borrowings at March 31, 2013 bore interest at annual rates ranging from 0.07% to 8.58% and mainly consisted of bank loans andshort-term notes maturing at various dates within one year.
Long-term debt at March 31, 2013 comprised the following:

Loans, principally from banks and insurance companies due from 2014 to 2072
with interest rates ranging from 0.40% to 6.22%:
Secured 
Unsecured 
Unsecured 2.74% bonds due March 29, 2072, redeemable before due date Unsecured 1.03% bonds due September 30, 2014, redeemable before due date Unsecured 1.50% bonds due June 1, 2017, redeemable before due date Unsecured 1.04% bonds due November 29, 2013, redeemable before due date Unsecured 1.14% bonds due November 29, 2013, redeemable before due date Capital lease obligations due from 2013 to 2029 with interest rates ranging from
1.45% to 7.93% 
Less: portion due within one year 
Total long-term debt 

2013

2013

(Millions of yen)(Thousands of
U.S. dollars)¥10,901
107,317
3,200
2,000
564
93
80

$ 115,906
1,141,063
34,024
21,265
5,997
989
851

5,039
129,194(25,251)¥103,943

53,5791,373,674(268,485)$1,105,189

The aggregate annual maturities of long-term debt outstanding at March 31, 2013 are summarized as follows:
Years ending March 31,

2014 
2015 
2016 
2017 
2018 
Thereafter 

30(Millions of yen)¥25,251
28,35823,298
19,101
13,444
19,742¥129,194(Thousands of
U.S. dollars)$268,485
301,521247,719
203,094
142,945
209,910$1,373,674

6. Financial Instruments(a) Overview
1. Policy for financial instruments
The Company and its consolidated subsidiaries (the “Group”) strive to diversify financing methods by managing temporary cash surpluses
primarily through short-term deposits, and 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, and forward trading in aluminum ingots for the 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 are exposed to credit risk in relation to customers. The Group manages the risks by controlling the due dates
and outstanding balances by individual customers. Accounts receivable-trade denominated in foreign currencies are exposed to risk of exchange
fluctuations and are hedged by utilizing forward foreign exchange contracts. Stocks of investment securities, which are exposed to market
fluctuations, are mainly those of other companies with which the Group has business relationships. The Group periodically reviews the fair valuesof 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 raised mainly in connection with business activities, and long-term borrowings are taken out principally for the
purpose of making capital investments. Variable rate borrowings are exposed to interest rate fluctuation risk. However, in order to reduce such risk
and fix interest expenses, the Group utilizes interest rate swap transactions as a hedging instrument for each individual contract. Assessment of theeffectiveness of hedging activities, which meets the requirements for special treatment of interest rate swaps, is omitted.
The execution and management of derivative transactions is performed based on the control procedure designated in management policy. In
addition, to reduce credit risk, utilizing derivative instruments is restricted to only highly rated financial institutions and major trading companies.
Notes and accounts payable-trade and borrowings, the Group prepares its cash flow plans to manage liquidity risk (the risk that the Groupmay 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,” are not necessarily indicative of the actual market
risk involved in the derivative transactions.
(b) Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the consolidated balance sheets as of March 31, 2013 and estimated fair value is as follows:
2013
Carrying Value *1

Estimated Fair Value *1

Difference(Millions of yen)

(1) Cash and deposits (2) Notes and accounts receivable – trade (3) Investment securities
Stocks of subsidiaries and affiliates 
Other securities (4) Notes and accounts payable-trade (5) Short-term borrowings *2 
(6) Bonds (7) Long-term borrowings *2 (8) Derivatives ¥36,027
114,906¥36,027
114,906

¥—
—

3,681
5,041
(62,266)(64,689)(5,937)(118,218)
(32)

1,324
5,041
(62,266)(64,689)(5,953)(119,134)(32)(2,357)
—
—
—
(16)
(916)
—

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

31Notes To Consolidated Financial Statements

2013
Carrying Value *1

Estimated Fair Value *1

Difference(Thousands of U.S. dollars)(1) Cash and deposits (2) Notes and accounts receivable – trade (3) Investment securities
Stocks of subsidiaries and affiliates 
Other securities (4) Notes and accounts payable-trade (5) Short-term borrowings *2 
(6) Bonds (7) Long-term borrowings *2 (8) Derivatives $383,062
1,221,754$383,062
1,221,754$——39,13953,599(662,052)(687,815)(63,126)(1,256,970)(340)

14,07853,599(662,052)(687,815)(63,296)(1,266,709)(340)(25,061)
—
—
—
(170)
(9,740)—*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
Since these items are settled in a short period of time, their carrying value approximates fair value.
(3) Investment securities
The fair value of stocks is based on quoted market prices. For information on securities classified by holding purpose, refer to Note 4“Investment Securities.”(4) Notes and accounts payable-trade, (5) Short-term borrowings
Since these items are settled in a short period of time, their carrying value approximates fair value.
(6) Bonds
The fair value of bonds is based on the present value of the total of principal and interest discounted by an interest rate determined taking
into account the remaining period of each bond and current credit risk.
(7) Long-term borrowings
The fair value of long-term borrowings is based on the present value of the total of principal and interest discounted by the interest rate tobe applied if similar new borrowings were entered into.
(8) Derivatives
Refer to Note 12, “Derivatives” of the notes the consolidated financial statements.
2. Unlisted stock of ¥17,647 million ($187,634 thousand) as of March 31, 2013 is not included in “(3) Investment securities” because no quoted
market prices are available and it is extremely difficult to measure the fair value.

32

3. The redemption schedule for receivables and marketable securities with maturities at March 31, 2013 is as follows:2013
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 
Investment securities
Held-to-maturity securities
Government and municipal bonds 
Corporate debt securities ¥35,976
114,906

¥—
—

¥—
—

¥—
—

2
—
¥150,884

7
10
¥17

6
—
¥6

—
—
¥—

2013
Due within
one year

Due after one year but
within five years

Due after five years but
within ten years

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

Cash and deposits Notes and accounts receivable-trade 
Investment securities
Held-to-maturity securities
Government and municipal bonds 
Corporate debt securities $382,520
1,221,754

$—
—

$—
—

$—
—

21
—
$1,604,295

74
106
$180

64
—
$64

—
—
$—

Due within
one year

Due after one year but
within five years

4. The redemption schedule for bonds and long-term borrowings at March 31, 2013 is as follows:2013
Due after
five years(Millions of yen)

Bonds Long-term borrowings ¥173
23,801¥23,974¥2,564
79,183¥81,747¥3,200
15,234¥18,434

2013
Due within
one year

Due after one year but
within five years

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

Bonds Long-term borrowings $1,839
253,068$254,907$27,262
841,925$869,187$34,024
161,978$196,002

33

Notes To Consolidated Financial Statements

7. Other Comprehensive Income
Each component of other comprehensive income for the year ended March 31, 2013 was as follows:

Unrealized gains on securities:
Amount arising during the year 
Reclassification adjustments for gains and losses realized in net income 
Before-tax amount 
Tax benefit Net-of-tax amount 
Unrealized losses on hedges:
Amount arising during the year 
Reclassification adjustments for gains and losses realized in net income 
Before-tax amount 
Tax benefit Net-of-tax amount Foreign currency translation adjustments:
Amount arising during the year Equity of other comprehensive income of affiliates:
Amount arising during the year 
Total other comprehensive income 

2013

2013

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

¥475
7
482
(132)
350

$ 5,051
74
5,125(1,404)
3,721

(63)
24
(39)
13
(26)

(670)
255
(415)
138
(276)

1,899

20,191572¥2,795

6,082$29,718

8. Retirement Benefit Plans
The Company and its domestic consolidated subsidiaries have defined benefit corporate pension plans and a non-contributory plan covering
substantially all employees in Japan. Additional benefits may be granted to employees according to the conditions under which termination of
employment occurs. Certain foreign subsidiaries have defined contribution pension plans.
Accrued pension and severance costs at March 31, 2013 are summarized as follows:

Projected benefit obligation 
Fair value of plan assets 
Unrecognized actuarial loss 
Unrecognized prior service cost 
Accrued pension and severance cost 

34

2013

2013

(Millions of yen)(Thousands of U.S.
dollars)¥(38,311)
18,808(19,503)
2,892
(370)
¥(16,981)$(407,347)
199,979(207,368)
30,750(3,935)$(180,553)

The net pension and severance costs related to retirement benefits for the year ended March 31, 2013 are summarized as follows:

Service cost Interest cost Expected return on plan assets 
Amortization of unrecognized actuarial gain 
Amortization of prior service costs 
Net pension and severance costs 

2013

2013

(Millions of yen)(Thousands of U.S.
dollars)¥2,142
513
(237)
557
(42)
¥2,933$22,776
5,455(2,520)5,922(447)$31,186

Assumptions used in calculating the above information are summarized as follows:2013

Mainly 1.5%
Mainly 2.0%
Straight-line basis
Mainly 15 years
Mainly 12 years

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

9. Income Taxes
The Company and its domestic consolidated subsidiaries are subject to a number of different taxes based on income which, in the aggregate,
indicate a statutory income tax rate of approximately 38.0% for the year ended March 31, 2013.
Significant components of deferred tax assets and liabilities at March 31, 2013 were as follows:

Deferred tax assets:
Tax loss carry forwards 
Accrued pension and severance costs 
Unrealized intercompany loss Allowance for doubtful accounts 
Accrued bonuses 
Loss on disposal of fixed assets 
Other Total deferred tax assets 
Valuation allowance 
Total deferred tax assets, net of valuation allowance 
Deferred tax liabilities:
Revaluation gain on subsidiaries 
Unrealized intercompany profit 
Negative Goodwill 
Unrealized gain on securities 
Other Total deferred tax liabilities 
Net deferred tax assets 

2013

2013

(Millions of yen)(Thousands o
U.S. dollars)¥20,062
5,934
3,254
1,893
1,833
931
9,076
42,983(23,758)
19,225$213,312
63,094
34,59920,12819,4909,899
96,501
457,023(252,610)
204,413(1,134)(1,061)
(842)
(485)
(583)
(4,105)¥15,120(12,057)(11,281)(8,953)(5,157)(6,199)(43,647)$160,766

35

Notes To Consolidated Financial Statements

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

Deferred tax assets (current assets) Deferred tax assets (investments and other assets) 
Other long-term liabilities 

2013

2013

(Millions of yen)(Thousands o
U.S. dollars)¥ 4,312
11,385(577)$45,848
121,053(6,135)In addition to the above, the Company recorded deferred tax liabilities on land revaluation surplus of ¥452 million ($4,806 thousand) at
March 31, 2013.
A reconciliation of the differences between the statutory income tax rate and the effective income tax rate for the year ended March 31, 2013
was summarized as follows:
2013

38.0%

Statutory income tax rate Increase (decrease) in taxes resulting from:
Valuation allowance Amortization of goodwill 
Permanent non-deductible expenses 
Inhabitant taxes per capita 
Effect of unrealized profit 
Unrealized intercompany profit and loss 
Equity in earnings of affiliates 
Non-taxable dividend income Other Effective income tax rate 

56.0
3.4
2.2
1.6
(28.9)(13.9)
(2.0)
(1.0)
(2.3)
53.1%

10. Appropriations of Retained Earnings
The following appropriation was approved at the ordinary general meeting of shareholders of the Company held on June 27, 2013:
Cash dividends (Millions of yen)(Thousands of U.S. dollars)¥1,632$17,352

The Company is required to obtain the approval of shareholders at an ordinary general meeting of shareholders for appropriations of retained
earnings in conformity with the Corporation Law. Appropriations of retained earnings are, therefore, not reflected in the consolidated financial
statements for the year to which they relate but are recorded in the consolidated financial statements in the subsequent year after shareholders’approval has been obtained.
11. Revaluation Surplus
A consolidated subsidiary of the Company revalued its land used for business purposes in accordance with the Land Revaluation Law, when it was
an affiliate. As a result of this revaluation, the Company recognized its portion of the affiliate’s revaluation surplus and the related deferred tax
liabilities.
12. Derivatives
In the normal course of business, the Company and its consolidated subsidiaries utilize various derivative financial instruments in order tomanage the exposure resulting from fluctuation in foreign currency exchange rates, interest rates and the prices of aluminum ingot in the market.
The Company and its consolidated subsidiaries do not hold or issue derivative financial instruments for trading purposes.

3613. Research and Development Costs
Research and development costs charged to cost of sales and selling, general and administrative expenses for the years ended March 31, 2013 was¥5,063 million ($53,833 thousand).
14. Contingent Liabilities
Contingent liabilities at March 31, 2013 amounted to ¥322 million ($3,424 thousand) for loans guaranteed and other guarantees given in theordinary course of business.
15. Loss on Impairment of Fixed Assets
The Company and its consolidated subsidiaries recognized ¥1,319 million ($14,024 thousand) of loss on impairment of fixed assets, of which thesignificant items for the year ended March 31, 2013 were as follows:
2013

Location
Higashiomi City,
Shiga Prefecture

Major use
Operating assets

Shizuoka City,
Shizuoka Prefecture

Operating assets

Asset category
Buildings and structures
Machinery and equipment
Machinery and equipment
Buildings and structures
Construction-in-progress
Tools, furniture and fixtures(Millions of yen)(Thousands of
U.S. dollars)¥677$7,198

3

32

¥177
175
49
0

$1,882
1,861
521
0

The Company recognized an impairment loss of ¥680 million ($7,230 thousand) for the operating assets in Higashiomi City, Shiga Prefecture. The
recoverable amount of the assets group is measured at net selling price and the net selling price is evaluated by estimated amount of disposal.
The Company recognized an impairment loss of ¥401 million ($4,264 thousand) for the operating assets in Shizuoka City, Shizuoka
Prefecture and the carry amounts of the relevant assets were written down to the memorandum value. Because the assets were quiescent due tochange to manufacturing process to product aluminum hydroxide and alumina from bauxite as main raw material from manufacturing process
to product alumina from aluminum hydroxide as main raw material.
The Company has grouped the operating assets by the independent operating, division who generates cash flows, the rental assets byadministrative business division and idle assets by individual asset itself.
16. Net Income Per Share
Net income per share for the years ended March 31, 2011 and 2012 were summarized as follows:2013

Net income NetincomeWeighted average
number of shares(Millions of yen)(Thousands of shares)(Yen)(U.S. dollars)¥3,355543,889

¥6.17

$0.07

Net income per share

Diluted net income was not presented because there were no bonds to be converted to shares at the year ends.

37

Notes To Consolidated Financial Statements

17. Business combinations
Transactions between entities under common control
1) Outline of transaction
Nippon Light Metal Holdings Company, Ltd. was incorporated as a holding company on October 1, 2012, following resolutions by the board of
directors of Nippon Light Metal Company, Ltd. on May 15, 2012 and the ordinary general meeting of shareholders on June 28, 2012 toincorporate the Company through a sole share transfer.
(1) Name of company conducting business combination and business activities
Name: Nippon Light Metal Company, Ltd.
Business activities: Manufacture and sale of alumina, chemical and aluminum products(2) Date of business combination
October 1, 2012
(3) Legal format of business combination
Incorporation of Holding Company through Sole Share Transfer(4) Name of company after business combination
Nippon Light Metal Holdings Company, Ltd.
(5) Purpose of business combination
Looking at Nippon Light Metal Group as a whole, the total sales volume of the Company’s consolidated subsidiaries and affiliates is threetimes larger than that of the Company.
The business scale of its consolidated subsidiaries and affiliates is significantly greater due to a result of the remarkable growth of theiroverseas businesses in China and Southeast Asia as well as the spin-off of certain of the Company’s businesses to subsidiaries and affiliates.
This trend is expected to continue in the future.
Under these circumstances, the Company has decided that, in order to achieve sustainable growth and enhance corporate value in the
Nippon Light Metal Group, it is necessary to transform from the current structure in which each business requires the involvement of theCompany and its consolidated subsidiaries and affiliates to a consolidated management setup that strictly separates management and theexecution of business functions. The Company, therefore, resolved to move to a holding company structure.
2) Outline of accounting treatment applied
In accordance with the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, December 26, 2008) and “Guidance on
Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, December 26,2008), it has been accounted for as a transaction between entities under common control.
18. Segment Information
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 within 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 primary and remelted ingot used for various industrial materials, andproduces a wide spectrum of aluminas and alumina hydrates ranging from raw materials to basic materials for ceramic compounds. The“Aluminum sheet and extrusions” segment produces sheet, coil, and extrusion products consisting primarily of shapes, tubes and rods. The“Fabricated products and others” segment produces a variety of products which include wing bodies for transport vehicles, automobile components
and electronic 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. “Corporate items” includes unallocated operating expenses and corporate assets not
specifically related to reportable segments.

38

Reportable segment information for the years ended March 31, 2013 was as follows:
2013
The reportable segments
Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts
and others

Aluminum
foil, powder
and paste

Adjustment(Note 1)

Consolidated¥88,606
648
89,254¥(771)¥106,968¥5,255¥834¥93¥5,175¥
—(62,939)(62,939)¥ (2,997)¥ 1,834¥ 101¥—¥—¥ 289¥371,887—
371,887¥8,154¥419,786¥16,259¥834¥1,319¥17,121

Aluminum
foil, powder
and paste

Adjustment(Note 1)

Consolidated(Millions of yen)

Net sales
Customers Intersegment 
Total Operating profit 
Segment assets 
Depreciation and amortization 
Amortization of goodwill 
Loss on impairment of fixed assets Capital expenditures ¥93,902
35,678
129,580¥3,273¥108,331¥3,781¥—¥406¥3,955¥63,161
17,84181,002¥1,675¥75,412¥3,905¥—¥680¥4,543¥126,218
8,772
134,990¥6,974¥127,241¥3,217¥—¥140¥3,159
2013

The reportable segments
Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts andothers(Thousands of U.S. dollars)

Net sales
Customers Intersegment 
Total Operating profit 
Segment assets 
Depreciation and amortization 
Amortization of goodwill 
Loss on impairment of fixed assets Capital expenditures $998,426
379,351
1,377,777$34,801$1,151,845$40,202$—$4,317$42,052$671,568
189,697861,265$17,810$801,829$41,520$—$7,230$48,304$1,342,031
93,2701,435,301$74,152$1,352,908$34,205$—$1,488$33,588$ 942,116
6,890
949,006$(8,198)$1,137,352$55,875$8,868$989$55,024$—(669,208)(669,208)$(31,867)$19,500$1,074$—$—$3,073$3,954,141—
3,954,141$86,698$4,463,434$172,876$8,868$14,024$182,041(Note 1). Adjustments amounts are as follows.
1) Adjustments of ¥(2,997) million ($(31,867) thousands) in segment profit are general corporate expenses.
2)	Adjustments of ¥1,834 million ($19,500 thousands) in segment assets include ¥(21,127) million ($(224,636) thousands) in theelimination of transactions between segments and ¥22,961 million ($244,136 thousands) in corporate assets.
3) Adjustments of ¥101 million ($1,074 thousands) in depreciation and amortization expenses have primarily to do with corporate assets.
4) Adjustments of ¥289 million ($3,073 thousands) for capital expenditures are the increase in corporate assets.
Geographical sales for the year ended March 31, 2013 was summarized as follows:
2013
Japan

Other

2013
Total

Japan

(Millions of yen)¥309,449¥62,438

Other

Total

(Thousands of U.S. dollars)¥371,887$3,290,260$663,881$3,954,141

As more than 90% of property, plant and equipment at March 31, 2013 was in Japan, the disclosure of geographical property, plant andequipment information has been omitted.
39

Report Of Independent Auditors

40

Overseas Network

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

Toyal America Inc.
Illinois, U.S.A.
Phone: 1-630-505-2160
Aluminum powder and paste(100%)
EuropeToyal Europe Société par
Actions Simplifiée
Unipersonnelle
Accous, France
Phone: 33-5-59-983-535
Aluminum powder and paste(100%)

East Asia
Nikkei MC Aluminum(Kunshan) Co., Ltd.
Kunshan, China
Phone: 86-512-5763-1946
Aluminum alloys(85%)

Nikkei (Shanghai) Body Parts
Co., Ltd.
Shanghai, China
Phone: 86-21-5986-9388
Automobile components(100%)
Nikkei (Shanghai)International Trading Co., Ltd.
Shanghai, China
Phone: 86-21-6236-9658
Sales and marketing bases(100%)NI Nikkei Shenzhen Co., Ltd.
Shenzhen, China
Phone: 86-755-2650-5656
Automobile components(55%)

Southeast Asia
Nikkei MC Aluminum(Thailand) Co., Ltd.
ThailandPhone: 66-38-5716-70
Aluminum alloys(79%)

Nikkei Siam Aluminium
LimitedThailandPhone: 66-2-529-0136
Aluminum sheet, foil
(100%)
Nikkei Singapore
Aluminium Pte. Ltd.
Singapore
Phone: 65-6293-3770
Trading and marketing(100%)

Nonfemet International(China-Canada-Japan)
Aluminium Co., Ltd.
Shenzhen, China
Phone: 86-755-2661-1569
Extrusion(18%)
Toyal Zhaoqing Co., Ltd.
Zhaoqing, China
Phone: 86-758-3602-080
Aluminum paste(90%)
Toyo Tokai Aluminium Hanbai(Shanghai) Co., Ltd.
Shanghai, China
Phone: 86-21-5257-4116
Trading and marketing(100%)
Sam-A Aluminium Co., Ltd.
Seoul, Korea
Phone: 82-31-6310-031
Aluminum foil, paste(33%)(As of July 31, 2013)41

Directors And Officers

Directors

Audit & Supervisory Board Member

President

Tadashi Asahi
Nobuo Matsumoto
Toshio Yamagishi
Yuzuru Fujita*2
Katsuo Wajiki*2
Yasuo Yuki*2

Representative Director

Takashi Ishiyama
Directors

Ichiro Okamoto
Makoto Fujioka
Mitsuru Ishihara
Toshihide Murakami
Yasunori Okamoto
Mikio Shimizu
President and Representative Director of Nikkeikin*2 Outside Member

Officers
Takashi Hara
Masamichi Ueda

Kakoh Kaihatsu Holdings Company, Ltd.

Hirokazu Takatoku

Masao Imasu
Hiroshi Yamamoto

Minoru Sotoike

President and CEO of Toyo Aluminium K.K.

Koji Ueno

Hideki Amimura
Takayuki Tsuchida

President and CEO of Nippon Fruehauf Co., Ltd.

Masato Ono*1
Ryoichi Hayashi*1*1 Outside Director

42(As of June 27, 2013)

Corporate Data

CORPORATE DATAHead Office

Major Shareholders

NYK Tennoz Building
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
http://www.nikkeikinholdings.co.jp
Phone: 81-3-5461-8601
Fax: 81-3-5461-8681

The Master Trust Bank of Japan, Ltd.
(trust accounts)(4.7%)

EstablishedThe Dai-ichi Mutual Life Insurance Co.
(3.7%)

October 1. 2012
Paid-In Capital¥39,085 million
Shares of Common Stock
Authorized: 2,000,000,000
Issued: 545,126,049
Number of Shareholders
54,447(Ratio of Stock Holding)Japan Trustee Services Bank, Ltd.
(trust accounts)(4.7%)

Isao Nasu(2.9%)
Nikkei-Keiyu-Kai(2.9%)
Asahi Mutual Life Insurance Co.
(2.8%)The Light Metal Educational Foundation, Inc.
(2.7%)

Stock Exchange Listings
Tokyo, Osaka*
Transfer Agent of Common Stock
The Mitsui Sumitomo Trust & Banking Co., Ltd.
Last Shareholders’ Meeting
June 27, 2013

Mizuho Corporate Bank, Ltd.
(2.1%)
Namekawa Aluminium Co., Ltd.
(1.7%)
Sumitomo Mitsui Trust Bank, Ltd.
(1.7%)* Osaka Securities Exchange Co., Ltd. has merged with Tokyo Stock Exchange Group, Inc. as of July 16, 2013.
(As of March 31, 2013)

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
herein involve risk and uncertainty, and that actual results could differ materially from those expressed or implied.
43

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

Printed in Japan