NIPPON LIGHT METAL COMPANY, LTD. ANNUAL REPORT 2012

A N N UA L R E P O RT

2012

Nippon Light Metal Company, Ltd.

Year ended March 31, 2012

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

Printed in Japan

Corporate Data

ProfileCORPORATE DATA

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

Head Office

Major Shareholders

NYK Tennoz Building
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
http://www.nikkeikin.co.jp
Phone: 81-3-5461-9211
Fax: 81-3-5461-9344(Ratio of Stock Holding)Establishedand food products industries.
By carrying on development of new applications for aluminum and aluminum materials, theMarch 30, 1939

NLM Group is to continue to support customers in wide-ranging industrial sectors and contribute toPaid-In Capital

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

¥39,085 million
Shares of Common Stock

Authorized: 1,600,000,000
Issued: 545,126,049

Consolidated Financial Highlight

Number of Shareholders

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

53,2862012

2011

Millions of yen

For the year:
Net sales 
Operating profit 
Net income Thousands of
U.S. dollars¥429,433 ¥403,009 $4,903,382
24,724
13,665
166,261
11,0402,856
34,749At year-end:
Total assets 
Net assets 
Short-term borrowings and long-term debt,
including bonds and capital lease obligation 

Net Sales
800

2012

414,885
104,757

422,671
108,849

5,142,609
1,324,358

193,695

191,074

2,324,784

Operating Profit
35

Stock Exchange Listings

Tokyo, Osaka
Transfer Agent of Common Stock

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

June 28, 2012

Total Assets

Japan Trustee Services Bank, Ltd.
(trust accounts)(11.4%)The Master Trust Bank of Japan, Ltd.
(trust accounts)(5.1%)The Dai-ichi Mutual Life Insurance Co.
(3.7%)
Japan Trustee Services Bank, Ltd.
(trust accounts 9)(2.9%)
Asahi Mutual Life Insurance Co.
(2.8%)The Light Metal Educational
Foundation, Inc.
(2.7%)
Nikkei-Keiyu-Kai(2.7%)
Mizuho Corporate Bank, Ltd.
(2.1%)
Namekawa Aluminium Co., Ltd.
(1.6%)
Retirement Benefit Trust in
Mizuho Trust & Banking Co., Ltd.
Mizuho Corporate Bank, Ltd. account;
Trust & Custody Services Bank, Ltd.
as a Trustee of Retrust(1.6%)

600

30
25

600

(As of March 31, 2012)

450

20
15

400

10

300

5
0

200

Cautionary Statement

150

-5

This annual report contains various projections and estimates. Important factors that could alter these projections and estimates include-10
02007 2008 2009 2010 2011 2012

Billions of yen

Years ended March 31-15changes in the balance of aluminum supply and demand, fluctuations in the price of aluminum ingot and foreign exchange rates, as2007 2008 2009 2010 2011 2012

Billions of yen

Years ended March 3102007 2008 2009 2010 2011 2012

Billions of yen

As of March 31

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

Contents

Consolidated Financial Highlights................................................................................................................. C2
To Our Shareholders........................................................................................................................................ 2
Special Feature................................................................................................................................................ 4
NLM Group Topics........................................................................................................................................... 7
Corporate Governance And Internal Control Systems.............................................................................. 8
NLM Group Environmental Activities .......................................................................................................... 10
Review Of Operations..................................................................................................................................... 11
NLM Group........................................................................................................................................................ 15
Consolidated Six-Year Summary................................................................................................................... 16
Financial Review.............................................................................................................................................. 18
Consolidated Balance Sheets....................................................................................................................... 20
Consolidated Statements Of 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

2012

2011
yen

2012
U.S. dollars

Per share data (yen and dollars):
Net income —basic —diluted 
Cash dividends 
Net assets ¥20.29 ¥5.25 $0.06
—
—
—
2.00
2.00
0.02
181.51184.71
2.25

Stock information (TSE) (yen and dollars):
Stock price:
High 
Low ¥189 ¥172 $2.09
96
89
1.08

Note: U.S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥82.19 = U.S.$1.00. See Note 2 of the Notes to the Consolidated Financial Statements.

Net Income per Share
30.0

Net Assets per Share

5.0

300.0
250.0

0

Cash Dividends per Share

4.0

200.0
3.0
150.0
2.0

-30.0

100.0
1.0

50.0
-60.0
Yen

0

2007 2008 2009 2010 2011 2012
Years ended March 31

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

Yen

2007 2008 2009 2010 2011 2012
Years ended March 31

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

0
Yen

2007 2008 2009 2010 2011 2012
As of March 31

1

To Our Shareholders

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.
I hereby report on the operating results for Nippon
Light Metal Company, Ltd. and its consolidated groupcompanies for fiscal 2011 (the year from April 1,
2011, to March 31, 2012).

Overview of Fiscal 2011
During the year under review, in the aluminum market,
shipments of automobile-related products, which were
extremely low at the start of the year due to the impact of theGreat East Japan Earthquake, began to recover. Constructionrelated demand also surpassed that of the previous year, but
exports fell due to the global economic slowdown, resulting ina slight overall decrease compared to the previous year.
Given these circumstances, the Group carried out manymeasures for strengthening our earnings base based on thethree-year Mid-Term Management Plan now in its second year.
The Group worked to reinforce the industry-leading business
infrastructure by investment for switching the raw material
used by the Aluminum Ingot and Chemicals segment from2

bauxite to aluminum hydroxide, while actively
expanding sales of high value added products byincreasing production of high-purity alumina for
LED sapphire substrates and developing lithium ion
battery-related materials.
For development of overseas business operations,
the Group steadily established a foundation for futuresustainable growth, including the creation of joint
ventures engaged in trailer business and automotive
parts business in China, and the construction of anew plant in Thailand for manufacturing room air
conditioner condensers.
The Group also promoted thorough efficiency
improvements and rationalization in all of its businessactivities and diligently engaged in sales activities.
However, the drop in demand resulting from theearthquake has not completely recovered, and as
a result, consolidated net sales for the year underreview decreased 6.2% year on year, to ¥403.0 billion.
Consolidated operating profit, consolidated ordinary
profit, and consolidated net income decreased 44.7%, 47.6%,
and 74.1% year on year, to ¥13.7 billion, ¥9.7 billion, and ¥2.9
billion, respectively.
Year-end dividend payment for the year under review willbe ¥2 per share, the same as the previous year. We ask for theunderstanding of all of our shareholders.

Overview by Business Segment
Sales in the Aluminum Ingot and Chemicals segment
decreased 7.3% year on year, to ¥99.6 billion, while operating
profit decreased 22.9% year on year, to ¥5.2 billion, due
mainly to flagging aluminum exports caused by the ongoingrecord appreciation of the yen, in addition to the drop in
overall demand resulting from the earthquake and subsequent
planned power outages.
Sales in the Aluminum Sheet and Extrusions segment
decreased 9.0% year on year, to ¥70.6 billion, while operating
profit decreased 69.1% year on year, to ¥1.6 billion. Revenue
and profits fell for the Aluminum Sheet operations due todecreased demand resulting from the earthquake and higher
material and fuel costs. Domestic sales rose for the Extrusions
operations, but declining sales of automobile-related parts in
China resulted in increased revenue and decreased profits.

Sales in the Fabricated Products and Others segment
increased 0.03% year on year, to ¥128.0 billion, while
operating profit increased 21.4% year on year, to ¥6.4 billion.
Demand for the van and truck outfitting business sector has
recovered since June of the previous year, and sales became
equivalent to those of the previous year. Furthermore, thePanel System sector saw significant revenue growth. Profits
improved thanks to efforts in each sector to increase sales ofhigh value added products and to reduce costs.
Sales in the Aluminum Foil, Powder and Paste segment
decreased 10.0% year on year, to ¥104.8 billion, while
operating profit decreased 66.8% year on year, to ¥3.4
billion. Revenue increased for the Paste sector, but fell for
the Aluminum Foil and Electronic Functional Materials
sectors. In terms of profit and loss, sales volume fell suddenly
for mainstay back-sheets and functional ink for solar cells,
resulting in reduced profits.

Key Topics during Fiscal 2011
In October of last year, the Company and its subsidiary, Nippon
Fruehauf Co., Ltd., formed a joint venture, Shangdong Conglin
Fruehauf Automobile Co., Ltd. (hereinafter referred to as“Conglin Fruehauf”), which engages in trailer manufacturing
and sales, together with two companies in the ITOCHU Groupand Conglin Group Co., Ltd. of China. Currently in China,
demand is greater for high capacity trailers than for trucks,
but there are increasing demands for fuel cost reductions anddelivery quality equivalent to that of Japan, producing an
increase in needs for high-function vehicles. This joint venturecombines the outfitting technologies of Nippon Fruehauf Co.,
Ltd. with marketing activities exploiting the ITOCHU Group’s
network to expand the business.
Also in October of last year, a room air conditioner
condensers manufacturing plant was completed in Thailand.
Demand for household room air conditioners is growing inSoutheast Asia, and this business sector will be developed into
one of the Group’s core businesses.
Nikkeikin Aluminium Core Technology Co., Ltd., asubsidiary in the Group, which already has automobile
component manufacturing sites in Shenzhen and Shanghai,
China, established a third site in China, Shandong Nikkei
Conglin Automotive Parts Co., Ltd. The company, in addition
to manufacturing automotive parts, supplies extruded

aluminum components to said Conglin Fruehauf, which
manufactures and sells trailers.

Outlook for Fiscal 2012
Against the promising backdrop of a recovery in personal
spending and economic recovery in the U.S. and Asia, theJapanese economy is expected to move towards a gradual
recovery for the next fiscal year. With regards to demand
for aluminum products, it is expected that transport-related
products will continue to perform strongly, and that electricaland electronics products have passed their nadir and will
gradually recover. Performance is forecast to surpass that ofthe previous year.
Based on the Basic Policies of the Mid-Term Management
Plan, the Group will steadily move forward with businessdevelopment both in Japan and abroad. The Group will also
reinforce industry-leading businesses, accelerate developmentof overseas business operations, and strengthen profitability inevery business segment, especially in the automotive, electricaland electronics, and environmental, safety, and energy fields.
In June of this year, we received authorization at the General
Meeting of Shareholders for transition to a pure holding
company format commencing from October of this year.
Even under this new corporate format, the Group will
combine its strengths to respond to increasingly advanced
and diverse needs and provide support to a range of industrial
fields, contributing to improvements in peoples’ lives. Led by
the holding company’s management strategies and efficient
distribution of management resources, the Group will strive
for sustainable development and increased corporate value.
The next fiscal year is projected to register net sales of¥400.0 billion, operating profit of ¥17.5 billion, and ordinary
profit of ¥14.0 billion.
I would like to ask for the continuing support of ourshareholders in these efforts.
June 2012

Takashi Ishiyama
President and CEO
3

Special Feature: Interview with the CEO

Takashi Ishiyama, President and CEO
1. What is your assessment of the second year of the Mid-Term Management Plan?
The year ended March 31, 2012 featured a harsh external business environment, including the continued impact of theGreat East Japan Earthquake, reduced exports due to appreciation of the yen caused by the financial crisis in Europe,and continuing economic stagnation in the U.S., plus the heavy flooding in Thailand from summer onwards.
However, one of the positive results for the year ended March 31, 2012 was that profit and loss management on an
individual product basis has become well-established across the Company. The NLM Group is currently performing
profit and loss management for almost 1,000 products and is constantly checking which products are profitable andwhich are not.
Our ability to maintain stable business results amidst this harsh business climate is a result of our individual
product profit and loss management.

2. “Overseas business development” is one of the pillars of the Mid-Term Management Plan.
Have overseas businesses been producing steady revenues?
All of our overseas businesses have turned a profit and, in fact, have higher profit margins than our domestic
businesses.
For example, Nikkeikin Aluminium Core Technology Co., Ltd. has plants in Shenzhen and Shanghai, China, both ofwhich are maintaining a high profit margin.
Toyo Aluminium K.K. also has plants in Zhaoqing and Ningxiang, China, both ofwhich are doing well despite having just been started and promise further
profit margin improvements in the future.
In Thailand, a new plant was completed in October of last year tohandle heat exchanger business. It has enjoyed strong customer demandand has already expanded its production capacity. In the panel systembusiness sector, a new plant will go into operation from July of this year.
In Southeast Asia there are few high quality panels for use in refrigerators
or clean rooms, so there have already been many customer inquiries, andheavy demand is expected.
Our overseas business activities use local personnel andlocal materials, making them cost effective against
local competitors. The NLM Group has a high level oftechnical expertise, so I believe it would be fair tosay that we will succeed if we offer products withequivalent price levels but superior quality.

4

Takashi Ishiyama,
President and CEO

3. What was the progress of “reinforcement of industry-leading businesses” during the year
ended March 31, 2012?
First, with regards to the alumina business sector, the raw material switchover will be completed this summer, putting
in place our alumina and aluminum hydroxide sales expanding system.
Within this sector, we have invested in our Shimizu Plant to expand production capacity for high-purity alumina
used for LED sapphire substrates, for which there is growing demand for use in lighting and LCD panels. The plant’s
production capacity has been raised from 300 metric tons per year to 1,000 metric tons per year. There are only alimited number of manufacturers worldwide that can supply high-grade, high-purity alumina. In addition toconsidering further facility expansion in the medium- to long-term, we are also engaged in developing high bulk
density products which increase user production efficiency.
In the aluminum foil and paste business sector, Toyo Aluminium K.K., following its paste business sector efforts lastyear, worked to increase its competitive power and brand strength in the aluminum foil business sector as well byreaching a basic agreement to buy out SUN-ALUMINIUM IND., LTD., a subsidiary of Kobe Steel, Ltd., which handles
household aluminum foil products. It also launched new, high value added products, such as “ToyalPass” in thecapacitor foil business sector, and “Chromashine (an interference color aluminum)” in the paste product sector.
It also developed and launched reduced cost back-sheets and electrode inks in the solar cell-related product sector.
The Group’s van and truck outfitting business activities were previously domestic only, but we have madetremendous advances and plan to begin mass production of trailers in China starting this summer through“Shangdong Conglin Fruehauf Automobile Co., Ltd.,” our joint venture with the ITOCHU Group and others.

4. How is “development of applications and creation of new products by exploiting researchand development capabilities” progressing?
One type of product which we anticipate greater sales of in the future is automobile suspension components. These
must be extremely strong, so there has been competition in developing them, not merely in the form of component
design and alloy development, but comprehensive strengths such as heat treatment and manufacturing processing as

5

Special Feature: Interview with the CEO

well. We are starting to receive orders for the forged products we developed by working together with research labs.
Sales are also increasing of plates for automobile heat exchangers using FLEXCASTER, a unique technology of ours,
and battery cables for hybrid vehicles.
We are also dedicating ourselves to lithium ion battery materials (case materials, outer cover foil, positive electrodematerials, negative electrode materials, and separators) for home and vehicle use, of which significant future growth isexpected. Sales of our outer cover foil are already steadily rising for use in electric vehicles and the like, and there arealso some other materials for which orders have officially been received.

5. What issues are you facing with regards to medium- to long-term growth?
We are currently devoting our efforts to overseas development, so first we must produce steady revenue in the regions
and fields we have moved into. Our greatest challenge is the cultivation of personnel who can manage overseas
business. Our sales, development, and manufacturing work together as one in developing business segments andcarrying out profit and loss management, led by our “develop, produce and sell” approach. We would like to send
overseas the personnel whose management skills have been cultivated in Japan through this approach.
We also provide a variety of training and learning opportunities in order to cultivate our employees. Specifically, thisincludes promoting active participation in external management cultivation training, and holding hands-on sales
presentations, technical presentations by research labs, and Toyota Production System explanatory sessions. We arealso active in utilizing female employees and hiring foreign employees.
In the future, I would like to take supportive approach through defensive measures, such as reducing sales, general andadministrative expenses and inventories and improving our financial standing.

6. Finally, do you have a message you wish to relay to shareholders and other stakeholders?
The NLM Group has built up a wide range of technologies and expertise relating to aluminum, from materials toprocessing. By fusing this knowledge and expertise, we would like to expand the number of applications of thisenvironmentally friendly metal, continue developing new next generation products, and, through provision ofenvironmentally friendly products and services, contribute to the creation of a sustainable society and the conservationof the global environment.
We will also take the lessons we have learned from the Great East Japan Earthquake to strengthen our risk
management approach, including our BCP (Business Continuity Plan), and enrich our internal control system.
Steadily implementing these measures, we will work to create a corporate group which offers even greater corporate
value. We would like to ask for the continuing support of our shareholders in these efforts.

6

NLM Group Topics

Nippon Light Metal to switch to a holding company format
from October 2012
As authorized at the General Meeting of Shareholders in June of this year, the Company will switch to a pureholding company format from October of this year.
Currently, sales of subsidiaries and affiliates within the Group are about three times greater than those of theCompany itself. Our subsidiaries account for this large percentage of total sales due not only to the splitting-off
of some business segments into their own companies, but also to large amounts of growth in overseas
subsidiaries in China, Southeast Asia, etc. This trend is expected to continue.
Therefore, in order for the Group to maintain sustained development and further improve its corporate value,
it is vital that the Group’s format be changed from the current condition, in which business segments are split
between the Company and its subsidiaries, to a consolidated management structure in which management andexecution are more distinctly separated.
The newly established Nippon Light Metal Holdings Company, Ltd. will handle management strategy creation
functions, led by its new corporate governance structure as a company which presides over the entire Group.
After the transition to the holding company format in October, strategic reorganization will be rapidly
implemented, taking into consideration the business characteristics of each Group company, their market
environments, etc., to put in place a corporate organization capable of dynamically responding to the markets,and promoting future growth strategy.

October 1
Holding company establishedand publicly listed

Strategic reorganization(e.g., transfer of some subsidiaries
to holding company)

STEP
1

STEP
2

Nippon Light Metal Holdings

Nippon Light Metal Holdings

Nippon Light Metal

Nippon Light Metal

Subsidiaries, etc.

Subsidiaries, etc.

Subsidiaries, etc.

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 11 directors, of whom two are outside
directors. This system enables agile management and sufficient deliberation by the Board of Directors. To clarify the roles 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 2011.
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 2011, 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

We shall comply with relevant laws and ordinances and shall take action independently
and actively on global environmental issues.
NLM 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 confined to one locality,and have been spreading and worsening to the extent that theycan endanger the global environment and the very existence ofhuman beings.
Actions and dedication are required for the national
government, local governments, citizens and companies toconstruct a sustainable, recycling-oriented economy and society
capable of coexisting with the environment preserved Earth. With
this mission strongly in mind, the NLM Group seeks a harmonious
coexistence with the natural environment in every aspect of its
corporate activities.
These efforts eventually lead to sound corporate activities
together with protecting the interests of shareholders, customers,
employees and local communities, which are the basis of NLM’sexistence. We also endeavor, as decent corporate citizens, torealize a truly affluent society through an environment-orientedsocial contributions.

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

Voluntary Action Plan for Reduction of Greenhouse Gas Emissions / NLM Group

Changes in Greenhouse Gas Emissions per Unit of Sales(t-CO2/million yen)

2.4
2.3

reference value
2.36

13%

2.2

2.14

reduction

2.1
2.03

2.07

2.0

1.93

1.98
1.9

1990

2007

2008

2009

2.04

2010

2011

*5 years average for the period from fiscal 2008 to fiscal 2012.

10

With regard to reduction of greenhouse gas emissions, we haveset a target of reducing greenhouse gas emissions per unit of sales
by fiscal 2012 so that the average level from fiscal 2008 to 2012 isreduced by 13% compared to fiscal 1990 levels.
For fiscal 2011, the level was 1.93 t- CO2/million yen; emissions
are decreasing steadily and we are on track for meeting ourtargets.
We are now in the process of formulating the Voluntary Action
Plan after fiscal 2013, taking into account social trend and otherfactors.

2012 (FY)target
The following CO2 emissions conversion factors have been used:
Electricity : CO2 emissions intensity in the previous year, announced by the Federation of Electric Power Companies of Japan (FEPC) (For fiscal 2009, fiscal 2010 and fiscal 2011, post-credit units were used). For fiscal 2012, 0.350kg-CO2/kWh (fiscal 2010) was used.
Fuel : In accordance with the Ordinance for the Enforcement of the Law Concerning the Promotion of Measures
to Cope with Global Warming, effective from April 2010

Review of Operations

Aluminum Ingot and Chemicals
Consolidated
Net Sales

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

24.7
99,560Millions of Yen■ Net Sales■ Consolidated Operating Profit■ Principal Products(Millions of Yen)

(Millions of Yen)

150,000

7,500

120,000

6,000

90,0004,500

60,0003,000

30,0001,500• Aluminum• Aluminum hydroxide• Chemicals (chemical products)• Caustic soda
• Chlorinated chemical products• Aluminum ingot• Aluminum alloys

0

’09

’10

’11

’12

0

’09

’10

’11

’12

%

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

■ Overview of results for fiscal 2011
In the Aluminum Ingot and Chemicals operations, alumina-related
shipments remained low due to stagnant demand caused by the
impact of the earthquake and subsequent planned power outages.
In addition, prolonged appreciation of the yen meant that exports ofalumina continued to stagnate, with sales falling below the level ofthe previous year.
In terms of chemicals, shipments of soda products such as caustic
soda and hydrochloric acid, and organic and inorganic chlorine
products were generally steady, due partly to substitute shipping
in response to requests from disaster-struck companies. However,production of the coagulant aluminum sulfate was temporarily

Aluminum Billet

suspended, as some of this production was performed at a plantwithin the designated evacuation zone for the Fukushima Daiichi
Nuclear Power Plant. Even after production resumed, demand frommajor customers was delayed, causing sales to fall far below the levelof the previous year.
As a result, overall sales fell below those of the previous year, andin terms of profits, the drop in alumina-related sales plus rising fuelcosts, etc. reduced profits, producing results far below those of theprevious year.
In the Aluminum Ingot operations, demand for mainstay
secondary alloy products for automotive applications, which had
fallen greatly due to the earthquake, showed a steady recovery alongwith the restoration of automobile manufacturing supply chains, but
the power shortages during the summer and the damage to customers
caused by the flooding in Thailand drove demand down once again,
and overall sales for the year under review fell below those of theprevious year.
In terms of profits, in addition to reduced sales volume, fiercer
price competition with imported goods caused by appreciation of theyen, the continued high price of raw material scrap, and other factors
kept revenue down, resulting in a reduction in profits compared tothe previous year.
As a result, Aluminum Ingot and Chemicals segment sales
decreased 7.3%, or ¥7,837 million year on year, to ¥99,560 million(¥107,397 million for the previous year), while operating profit
decreased 22.9%, or ¥1,556 million year on year, to ¥5,227 million(¥6,783 million for the previous year).
11

Review of Operations

Aluminum Sheet and Extrusions
Consolidated
Net Sales

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

■ Net Sales■ Consolidated Operating Profit■ Applications(Millions of Yen)

(Millions of Yen)

• Automobile

80,0006,000

60,0003,000

40,0000

20,000-3,000

0

’09

’10

’11

’12

-6,000

’09

’10

’11

’12

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

■ Overview of results for fiscal 2011
In the Aluminum Sheet operations, automobile-related sales
recovered from the latter half onwards, but fell greatly for the year
as a whole due to the impact of the earthquake. Furthermore,
shipments of thick plates for semiconductor and LCD manufacturing
equipment fell sharply from summer onwards, and shipments ofbasic materials for electrical machinery and electronics and foil
stock for capacitors also fell greatly compared to the previous year.
As a result, overall sales for the segment fell significantly below thoseof the previous year.

Aluminum Sheet

1270,618Millions of Yen

17.5%■ 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, profitability fell considerably compared to theprevious year as a result of decreased sales, increased material andfuel costs, and the like.
In the Extrusions operations, plans for railway car fleet expansion
were reduced, causing sales volume to fall, and sales of automotive
parts in China fell as well. However, the transport industry saw a rapid
recovery in sales of automotive parts and truck components in thedomestic market, thanks to the restoration of automobile manufacturing
supply chains. Demand for building materials kept rising for the year
under review as in the previous year. As a result of these factors, overallsales for the segment exceeded the level of the previous year.
In terms of profits, profits rose domestically in line with increased
sales, but in China, reduced sales of automobile-related parts resulted
in reduced profits, and overall profit for the segment fell slightly
below the level of the previous year.
As a result, Aluminum Sheet and Extrusion segment sales decreased
9.0%, or ¥7,006 million, to ¥70,618 million (¥77,624 million for theprevious year). Operating profit decreased 69.1%, or ¥3,509 million,to ¥1,569 million (¥5,078 million for the previous year).
In March 2012, the Group established Shandong Nikkei Conglin
Automotive Parts Co., Ltd., a local joint venture, in the Shandong
Province, China. It will be engaged in manufacturing and sales ofautomobile-related parts including truck components in China.
Manufacturing and sales of automobile-related parts in China havealready been underway in Shenzhen and Shanghai, but the Groupplans to expand business operations in the Northern and Northeastern
China areas, where demand is expected to continue to grow.

Review of Operations

Fabricated Products and Others
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 foraluminum electrolytic capacitors, automotive parts, and carbon products.

127,972
Millions of Yen

31.7
31.8
%

■ Net Sales■ Consolidated Operating Profit■ Applications■ Principal Products(Millions of Yen)

(Millions of Yen)

• 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

’09

’10

’11

’12

0

• Transport• Electronics• Building materials
and infrastructurematerials

’09

’10

’11

’12

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

■ Overview of results for fiscal 2011
In the Transport-Related sector, shipments fell sharply in April and
May in the van and truck outfitting business due to reduced truck
manufacturing as a result of the earthquake, but began to recover inJune and, as domestic demand grew, rose to a high level. This resulted
in sales equivalent to those of the previous year.
In October 2011, Shangdong Conglin Fruehauf Automobile Co.,
Ltd. was established in Shandong Province, China, as a joint venturewith local companies. Shangdong Conglin Fruehauf will be a trailer
manufacturing and sales site in China. The company will receive
parts from Shandong Nikkei Conglin Automotive Parts Co., Ltd.,working to build a stronger supply chain to serve the Chinese market,
in which demand for aluminum trailers is expected to grow.
In the area of capacitors for car air conditioners, in addition tostrong shipments for lightweight vehicles, demand increased due to therestoration of the “Eco-car” subsidy program during the latter half.
However, this was insufficient to counteract the decrease in automobile
manufacturing and demand stagnation caused by the earthquake
during the first half, and sales fell below those of the previous year.
In October 2011, a new room air conditioner condenser
manufacturing plant was constructed in Thailand. The economic
growth in Southeast Asia has created growing demand for householdroom air conditioners, and the Group is striving to make this into
one of its core business segments by exploiting the energy saving, size
reduction, and performance enhancement technologies it has developed
through its experience with car air conditioners, making inroads into
the room air conditioner condenser business sector in the region.
The Shaped Parts sector moved towards recovery in the summer fromthe drop-off in shipments resulting from the earthquake, but during thelatter half, the flooding in Thailand caused some automobile manufacturers to suspend production, causing shipment volumes to fall again.
As a result, overall sales fell slightly below those of the previous year.

• Food and lifestyle

In the Electronic Materials sector, demand for anodized aluminum
foil for aluminum electrolytic capacitors recovered rapidly from theearthquake during the first half, and demand for manufacturing
equipment increased, resulting in strong shipments. However, in thelatter half, customers, pressed by appreciation of the yen, performed
inventory adjustments, creating a very harsh demand environment,
resulting in sales falling far below those of the previous year.
In the Panel System sector, shipments of small and medium sized
products for industrial refrigerators and freezers trended positively, anddemand rose temporarily as a result of earthquake recovery efforts.
Because of these factors, sales exceeded those of the previous year. With
regards to clean rooms, appreciation of the yen accelerated customers’
overseas expansion activities, causing the domestic market to stagnate.
However, earthquake recovery construction works caused an increase in
shipments and sales, which exceeded those of the previous year.
In the Carbon Product sector, conditions were harsh, with sharp
appreciation of the yen, and low demand from steel and aluminum
smelters, the sector’s major customers. However, the Group endeavored
to increase sales of carbon blocks for blast furnaces and electric furnace
and unshaped materials for electrodes, and to reduce costs. As a result,both sales and profit results rose above those of the previous year.
On March 15, 2012, the Group transferred 40% of its shares of
Nippon Electrode Co., Ltd. to Mitsubishi Corporation. The managerial
participation of Mitsubishi Corporation, which has a strong carbon
product network and extensive know-how, will help propel theoverseas development and new business sector cultivation of Nippon
Electrode Co., Ltd., as well as expanding its business scope.
As a result, sales in the Fabricated Products and Others operations
increased 0.03%, or ¥43 million, to ¥127,972 million (¥127,929 million
for the previous year). Operating profit increased 21.4%, or ¥1,128
million, to ¥6,392 million (¥5,264 million for the previous year).
13

Review of Operations

Aluminum Foil, Powder and Paste
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 andproducts of high functionality in both domestic and overseas markets.

26.0%

104,859
Millions of Yen■ Net Sales■ Consolidated Operating Profit■ Applications■ Principal Products(Millions of Yen)

(Millions of Yen)

120,000

12,00090,0009,000

60,0006,000• 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

30,000

3,000

0

’09

’10

’11

’12

0

’09

’10

’11

’12

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

■ Overview of results for fiscal 2011
In the Aluminum Foil sector, demand for high-purity aluminum
foil for electrolytic capacitors recovered during the summer to preearthquake levels, but during the latter half, capacitor inventory
adjustments caused a sharp drop in demand. Shipments in thealuminum foil business were strong overall, including those of plain
foil for lithium ion battery surfaces, but fell in the latter half for someproducts such as fabricated foil for pharmaceutical packaging. As aresult, overall sales fell below those of the previous year.
In the Paste sector, shipments decreased for aluminum paste
for electrical appliances and plastic paint in the domestic market.
Sales of mainstay aluminum paste for use in automobile paint rose

Aluminum Foil

14

Solar Panelduring the latter half along with the resumption of automobile
manufacturing, as well as for inks used for beverage containers.
With regards to exports, shipments to China fell due to the country’s
economic slowdown, but shipments to Korea and Indonesia werestrong. As a result, overall sales exceeded those of the previous year.
In the Electronic Functional Materials sector, sales of functional
materials, mainly powder products, were strong due to shipments
to China for IT-related applications and LED components. However,sales volume of mainstay back-sheets and functional ink for solar
cells fell sharply due to the shrinkage of power fixed price buybacks
in our principal European markets, as well as inventory adjustments,
resulting in overall sales falling far below those of the previous year.
As a result, sales in the Aluminum Foil, Powder and Paste sector
decreased 10.0%, or ¥11,624 million, to ¥104,859 million (¥116,483
million for the previous year). Operating profit decreased 66.8%, or ¥6,843
million, to ¥3,402 million (¥10,245 million for the previous year).

NLM Group

Nippon Light Metal Group consists of 81 subsidiaries and 22 affiliates (as of March 31, 2012).
The Group’s major operations and the business relations between the Company, major consolidated subsidiaries andaffiliates accounted for by the equity method are shown in the diagram below.

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

● Nikkei Sangyo Co., Ltd.

● Nikkei MC Aluminium Co., Ltd.

● Tamai Steamship Co., Ltd.

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

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

● Nikkeikin Kakoh Kaihatsu Holdings● Nikkeikin Aluminium Core Technology Co., Ltd.

Aluminum
Sheet andExtrusions● Nikkei Siam Aluminium Ltd.

Company, Ltd.

● Nikkei Sangyo Co., Ltd.

● Riken Light Metal Industrial Co., Ltd.
● Nonfemet International (China-Canada-Japan)

Aluminium Co., Ltd.

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

FabricatedProducts
and Others(Manufacture and Sales)(Sales and Others)● NLM ECAL Co., Ltd.

● Nikkei Information System Co., Ltd.

● Nikkei Kenzai Kogyo Co., Ltd.

● Nikkei Logistics Co., Ltd.

● Nikkei Sangyo Co., Ltd.

● Sumikei Nikkei Engineering Co., Ltd.

● Nikkei Panel System Co., Ltd.

● Toho Earthtech Inc.

● Nikkei Matsuo Co., Ltd.
● Nippon Electrode Co., Ltd.
● Nippon Fruehauf Co., Ltd.
● Nikkei Heat Exchanger Co., Ltd.

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

Aluminum
Foil, Powder
and Paste● Tokai Aluminum Foil Co., Ltd.
● Toyal America Inc.
● Toyal Europe S.A.S.U.
● Toyo Aluminium Ekco Products Co., Ltd.
● Sam-A Aluminium Co., Ltd.

CUSTOMER● Consolidated subsidiaries: 75 companies● Affiliates accounted for by the equity method: 13 companies

Note : Shin Nikkei Co., Ltd. ceased to be a subsidiary of the Company on April 1, 2010.

Flow of products and raw materials
Flow of services(As of March 31, 2012)15

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

Gross Profit and
Gross Profit Margin2007%

150,000

Gross Profit
Gross Profit Margin20

90,00015

60,00010

30,0005

02007 2008 2009 2010 2011 2012

Millions of yen

0Years ended March 31

Interest-bearing Debt
300,000

250,000

200,000

150,000

100,000

50,00002007 2008 2009 2010 2011 2012

Millions of yen

Years ended March 31

Free Cash Flows
30,00025,00020,00015,00010,0005,000

0-5,0002007 2008 2009 2010 2011 2012

Millions of yen

16(Millions of yen)25

120,000

Years ended March 31

2008

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

¥618,158
120,345
19.5
30,51925,24812,755¥647,846
108,946
16.8
17,998
11,222(10,310)

110,667
78,929255,514173,048—
618,158

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

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

9,172
1,630
13,212(2,976)—(3,040)17,998340,897
184,070
5,969
48,527
287,436
149,916130,176
7,770
4,165
223,607

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

21,397
17,481(19,514)
20,702
12,48325,018
20,160(25,051)
25,263(9,028)¥23.5622.36
254.825.0¥(19.00)—
223.61
3.0

9.3
9.7
23.8

4.5
(7.9)
22.5

543,350¥5,504
13,493545,126¥5,858
14,084Note 1: U.S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥82.19 =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.

2009

2010

2011

2012

Return on Capital Employed(ROCE)

2012(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)9

6¥554,094
76,72013.8(11,892)(16,936)(31,442)¥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
13,665
9,709
2,856$4,903,382
822,472
16.8
166,261
118,129
34,749120,725
66,766
226,543
140,060—
554,094

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
403,009

1,211,340
859,204
1,557,026—
1,275,812
4,903,382

748(5,737)3,976(7,870)—(3,009)(11,892)

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)
13,66563,597
19,09077,771—
41,391(35,588)
166,261

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

258,839
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

2,739,993
1,824,054
80,314498,248
2,336,902
1,481,349
1,217,095
5,208
101,983
2,283,696

26,674
22,113(22,086)
24,997
6,422

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)

237,705
207,324(222,521)
281,871(84,134)¥(57.77)—
154.22—¥3.83
3.63
163.13—¥20.29—181.512.00¥5.25—184.712.00$0.06
—
2.25
0.02

(4.1)
(30.6)
17.5

2.2
2.4
18.5

7.9
11.8
23.8

4.9
2.9
23.8

4.9
2.9
23.8

545,126
5,972
13,678545,126
5,085
12,854545,126
4,798
9,739

545,126
4,902
10,041

545,126$59,642
10,041

3

0

-3

-6

2007 2008 2009 2010 2011 2012

Years ended March 31%

Return on Equity (ROE)
20

10

0

-10

-20

-30

-40

2007 2008 2009 2010 2011 2012

Years ended March 31%

R&D Expenditures
7,000

6,000

5,000

4,000

3,000

2,000

2004
1,000

0

2007 2008 2009 2010 2011 2012

Millions of yen

Years ended March 31

17

Financial Review

Overview
The Japanese economy during fiscal 2011 (year ended March
31, 2012) showed signs of recovery along with supply chain
recovery, from the significant decline precipitated by the Great
East Japan Earthquake, but the global economic slowdown
and continuing appreciation of the yen backed by the credit
crisis in Europe from August onward brought the recovery to a
standstill, preventing it from turning into a full recovery.
With regards to domestic demand for aluminum,
automobile-related shipments, which fell sharply at the startof the period, began to recover. Construction-related demandalso surpassed that of the previous year, but exports fell dueto the global economic slowdown, resulting in a slight overall
decrease for the year under review.
Given these circumstances, the NLM Group carried out
many measures for strengthening its earnings base based on
the Mid-Term Management Plan, a three-year plan now in its
second year. Specifically, the Group worked to reinforce theindustry-leading business infrastructure and increase sales ofhigh value added products by continuing investment for
switching the raw material used by the Aluminum Ingot andChemicals segment from bauxite to aluminum hydroxide, as
well as by increasing production of high-purity alumina for
LED sapphire substrates. In overseas business operations, theNet Sales By Segment
700

Group steadily established a foundation for futuresustainable growth, including the creation of joint ventures
engaged in trailer outfitting business and automotive parts
business in China and the construction of a new plant inThailand for manufacturing room air conditioner
condensers.
The Group also promoted thorough efficiency
improvements and rationalization in all of its businessactivities and vigorously engaged in sales activities.
Earnings and Expenses
However, demand failed to recover from the slump caused by
the earthquake, and NLM’s consolidated net sales for the year
under review decreased 6.2% year on year, to ¥403.0 billion($4,903 million). For sales and other financial performanceby business segment, please see the Review of Operation inpages 11 to 14.
The cost of goods sold decreased 4.5% year on year, to¥335.4 billion ($4,081 million), while the cost to sales ratio
decreased 1.4 percentage points year on year, to 83.2%.
Selling, general and administrative expenses decreased 0.9%
year on year, to ¥53.9 billion ($656 million). As a result,operating profit decreased 44.7% year on year, to ¥13.7 billion($166 million).

Total Net Assets

Equity Ratio

150

25

120

20

90

15

60

10

30

5

600
500
400
300
200
100
0

2008

Billions of yen

2009

2010

2011

2012

Years ended March 31

0

2008

2009

2010

Billions of yen

Aluminum Ingot and Chemicals
Aluminum Sheet and Extrusions
Fabricated Products and Others
Building Materials
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 not include numbers form the Building Materials segment.

18

2011

0

2012

As of March 31

%

2008

2009

2010

2011

2012

As of March 31

Non-operating income increased 12.0% year on year, to¥3.3 billion ($40 million). This resulted from an increase inequity in earnings of affiliates and other factors. Nonoperating expenses shrank 20.7% year on year, to ¥7.2 billion($88 million). This resulted from a decrease in other nonoperating expenses. As a result, ordinary profit decreased
47.6% year on year, to ¥9.7 billion ($118 million).
For special gains, ¥0.7 billion ($9 million) gain on salesof investments in subsidiaries and affiliates was recorded,
while special losses of ¥1.0 billion ($12 million) wererecorded. This was a result of recording ¥0.7 billion ($9million) special retirement expenses and ¥0.3 billion ($3million) loss on impairment of fixed assets.
As a result, the income before income taxes and minority
interests of ¥9.5 billion ($115 million) was recorded for theperiod under review. Corporate, inhabitant and business taxes
increased ¥0.1 billion year on year, to ¥3.4 billion ($42
million). Meanwhile, deferred income taxes during the period
under review were ¥2.5 billion ($31 million).
As a result of the above, net income in the period underreview decreased 74.1% year on year, to ¥2.9 billion ($35
million). The average number of shares outstanding
decreased from 544,012 thousand in the previous year to543,934 thousand in the year under review. Therefore, net
income per share decreased from ¥20.3 in the previous year
to ¥5.3 ($0.06) in the period under review. Payment ofannual cash dividend of ¥2.0 ($0.02) per share was approvedby the resolution at the General Meeting of Shareholders heldon June 28, 2012.
Assets, Liabilities and Shareholders’ Equity
Total assets as of March 31, 2012 increased ¥7.8 billion (up1.9%) year on year, to ¥422.7 billion ($5,143 million). Total
liabilities increased ¥3.7 billion (up 1.2%) year on year, to¥313.8 billion ($3,818 million), despite refinancing in
conjunction with bond retirement. Interest-bearing debt
decreased ¥3.1 billion year on year, to ¥187.7 billion.
Net assets increased ¥4.1 billion (up 3.9%) year on year,to ¥108.8 billion ($1,324 million), thanks primarily to anincrease in retained earnings due to the recording of net
income in the period under review. Net assets per share as ofMarch 31, 2012 increased 1.7% year on year, to ¥184.71($2.2), while the equity ratio stayed at 23.8%, the same as theprevious year.

Cash Flows
Cash and cash equivalents on a consolidated basis as ofMarch 31, 2012 decreased ¥5.7 billion (down 13.5%) year on
year, to ¥36.5 billion ($444 million).
Net cash provided by operating activities decreased ¥6.9
billion (down 26.2%) year on year, to ¥195 billion ($238
million). This was because non-cash profit/loss items such as
depreciation and amortization as well as income before
income taxes and minority interests were greater than theincrease in working capital.
In the fiscal year under review, ¥18.3 billion net cash wasused in investing activities, compared with ¥1 billion net cash
provided by the same activities in the previous year. This wasprimarily due to reduced collections of loans receivable.
Net cash used in financing activities decreased ¥23.8
billion (down 77.5%) year on year, to ¥69 billion ($84
million). This was primarily due to reduced collections ofloans receivable.
Outlook for Fiscal 2012
Against the promising backdrop of a recovery in personal
spending and economic recovery in the U.S. and Asia, theJapanese economy is expected to move towards a gradual
recovery in fiscal 2012. With regards to demand foraluminum products, it is expected that transport-related
products will continue to perform strongly, and that electricaland electronics-related products will gradually recover. The
performance is forecast to surpass that of the previous year.
The Group will steadily move forward with businessdevelopment both in Japan and abroad, and will also
reinforce industry-leading businesses, accelerate developmentof overseas business operations, and strengthen profitability
in every business segment, especially in the automotive,
electrical and electronics, and environmental, safety, andenergy fields.
For fiscal 2012, we expect net sales of ¥400.0 billion,
operating profit of ¥17.5 billion, ordinary profit of ¥14.0
billion, and net income of ¥8.5 billion. Net income per shareis predicted to be ¥15.63, while cash dividends per share have
not yet been decided.

19

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

2011

March 31,
2012

(Millions of yen)

2012
(Thousands of
U.S. dollars)(Note 2)

AssetsCurrent assets:
Cash and deposits (Notes 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 ¥42,073 ¥36,568
115,204
118,043
22,45522,51912,246
14,651
18,30318,995
5,367
6,321
7,681
9,379
(1,373)(1,276)
221,956
225,200$444,920
1,436,221
273,987
178,258
231,11176,907
114,114(15,525)
2,739,993

Property, plant and equipment (Note 5):
Land 
Buildings and structures 
Machinery and equipment 
Construction-in-progress 
Accumulated depreciation 
Total property, plant and equipment 53,735116,515251,224
4,676(282,383)
143,767

53,460120,115
261,189
8,988(293,833)
149,919

650,444
1,461,431
3,177,868
109,357(3,575,046)
1,824,054

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

896
3,562
4,458

2,778
3,823
6,601

33,80046,51480,314

Investments 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 

24,00815,2275,996(527)
44,704

24,714
11,794
4,919(476)
40,951

300,694
143,497
59,849(5,792)498,248¥414,885¥422,671$5,142,609

Total assets 

20

2011

March 31,
2012

(Millions of yen)

Liabilities and net assets
Current liabilities:
Short-term borrowings (Note 5) Current portion of long-term debt (Note 5) Notes and accounts payable – trade 
Income taxes payable 
Other current liabilities 
Total current liabilities Long-term liabilities:
Long-term debt (Note 5) Accrued pension and severance costs (Note 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: 1,600,000,000 shares
Issued: 545,126,049 shares 
Additional paid-in capital Retained earnings Treasury stock, at cost
(1,162,058 shares in 2011 and 1,216,559 shares in 2012) 
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 

2012(Thousands of
U.S. dollars)(Note 2)

¥ 67,423
17,634
67,2682,550
27,828
182,703¥63,601
24,11369,3902,668
32,298
192,070$773,829
293,381844,263
32,461
392,968
2,336,902

108,638
16,438516
1,833
127,425
310,128

103,360
16,597452
1,343
121,752
313,822

1,257,574
201,935
5,499
16,341
1,481,349
3,818,251

39,085
11,17948,20039,085
11,17949,968475,545
136,014607,957

(192)

(199)

(2,421)

98,272100,033

1,217,095

980
61
145
(723)
463
6,022
104,757

1,092
3
145
(806)
434
8,382
108,849

13,28637
1,764(9,807)
5,280
101,983
1,324,358¥414,885¥422,671$5,142,609

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

21

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

Year ended March 31,
2012

2011

(Millions of yen)

Net sales 
Cost of sales (Note 13) 
Gross profit 
Selling, general and administrative expenses (Note 13) 
Operating profit 
Non-operating income:Interest income Equity in earnings of affiliates 
Rental income Other Total non-operating income Non-operating expenses:
Interest expense Amortization of transition obligation for employees’ retirement benefits (Note 8) 
Other Total non-operating expenses 
Ordinary profit Special gains:
Gain on sales of affiliates’ stocks Total special gains Special losses:
Special retirement expenses 
Loss on impairment of fixed assets 
Loss on valuation of investment securities 
Loss on disposal of non-current assets 
Loss on adjustments for adoption of accounting standard for asset retirement obligations 
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 15):
Net income Cash dividends 
The accompanying notes are an integral part of these financial statements.

22

2012
(Thousands of
U.S. dollars)(Note 2)¥429,433
351,267
78,16653,442
24,724¥403,009
335,410
67,59953,934
13,665$4,903,382
4,080,910
822,472
656,211
166,261

97
290
719
1,830
2,936

76
636
766
1,811
3,289

925
7,738
9,320
22,03440,017

2,815
1,113
5,203
9,131
18,529

2,756
1,112
3,377
7,245
9,709

33,532
13,52941,08888,149118,129

—
—

724
724

8,809
8,809

—
106
1,046
838
89
2,079
16,450

708
251
—
—
—
959
9,474

8,614
3,054
—
—
—
11,668115,270

3,285
1,042
4,327
12,123
1,083¥11,040

3,416
2,509
5,925
3,549
693
¥2,856

41,56230,52772,08943,181
8,432$34,749(Yen)¥20.29 ¥5.25
2.00
2.00

(U.S. dollars)(Note 2)

$0.060.02

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

Year ended March 31,
2012

2011

(Millions of yen)

2012
(Thousands of
U.S. dollars)(Note 2)

¥12,123¥3,549$43,181

Net unrealized gains (losses) on securities 

(618)

121

1,472

Net unrealized losses on hedges 

(97)

(58)

(706)

Foreign currency translation adjustments 

(361)

7

85

Equity of other comprehensive income of affiliates 

(126)

(84)

(1,022)

Total other comprehensive income (Note 7) 

(1,202)

(14)

(171)

¥10,921¥3,535$43,010¥ 9,996¥2,827$34,396

925

708

8,614

¥10,921¥3,535$43,010

Income before minority interests 
Other comprehensive income

Comprehensive income Attributable to:Shareholders of the parent 
Minority interests 

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

23

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

2011
Shareholders’ equity
Commonstock

Balance at April 1, 2010 
Deficit disposition 
Net income 
Net increase in treasury stock 
Net unrealized losses on
securities (Note 4) Net unrealized losses on hedges 
Foreign currency translation
adjustments 
Net increase in minority interests
in consolidated subsidiaries 
Balance at March 31, 2011 ¥39,085

Additional
paid-in
capitalRetainedearnings¥25,420 ¥22,919(14,241) 14,241
11,040Treasurystock,
at cost¥(179)

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)

¥1,590¥11,179¥48,200¥145¥(386)(13)(610)¥39,085¥158¥(192)¥ 980

(610)
(97)

(97)

¥ 61

¥4,372 ¥93,124—
11,040
(13)

¥145

(337)

(337)

¥(723)

1,650
1,650¥6,022 ¥104,757

2012
Shareholders’ equity

Balance at April 1,2011 
Net income Cash dividends 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, 2012 Commonstock

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

Retainedearnings¥48,200
2,856(1,088)Treasurystock,
at cost¥(192)

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)¥ 980¥11,179¥49,968¥145¥(723)(7)
112¥39,085¥ 61¥(199)¥1,092

112
(58)

(58)

¥3

¥6,022 ¥104,757
2,856(1,088)
(7)

¥145

(83)

(83)

¥(806)

2,360
2,360¥8,382 ¥108,849

2012
Shareholders’ equity
Commonstock

Balance at April 1,2011 
Net income Cash dividends 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, 2012 

Additional
paid-in
capitalRetainedearnings$475,545 $136,014 $586,446
34,749(13,238)$(2,336) $11,924$742$1,764(85)$(8,797) $ 73,269 $1,274,571
34,749(13,238)
(85)

1,362

1,362
(705)

(705)
(1,010)$475,545 $136,014 $607,957

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)$(2,421)$13,286$37$1,764(1,010)28,71428,714$(9,807) $101,983 $1,324,358

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

2011

Year ended March 31,
2012(Millions of yen)

Cash flows from operating activities
Income before income taxes and minority interests 
Depreciation and amortization 
Special retirement expenses 
Loss on impairment of fixed assets 
Loss on valuation of investment securities 
Loss on disposal of non-current assets 
Loss on adjustment for adoption of accounting standard for asset retirement obligations 
Gain on sales of affiliates’ stocks Increase (decrease) in allowance for doubtful accounts Increase in accrued pension and severance costs Interest and dividend income Interest expense 
Equity in earnings of affiliates 
Increase in notes and accounts receivable – trade 
Increase in inventories 
Increase in notes and accounts payable – trade 
Other Subtotal Interest and dividend income received Interest paid 
Payments for additional retirement payments 
Payments for corrective measures for product defects Income taxes paid 
Net cash provided by operating activities 
Cash flows from investing activities
Payments into time deposits Proceeds from withdrawal of time assets 
Payments for purchases of fixed assets Proceeds from sales of fixed assets 
Payments for purchases of investment securities Proceeds from sales of investment securities 
Purchase of stocks of subsidiaries and affiliates Proceeds from sales of stocks of subsidiaries and affiliates 
Payments of loans receivable Collection of loans receivable 
Purchase of subsidiaries’ share resulting in change in scope of consolidation Proceeds from sales of investments in subsidiaries resulting in change in scope of consolidation 
Other Net cash provided by (used in) investing activities 
Cash flows from financing activities
Net decrease in short-term borrowings Proceeds from long-term debt 
Repayments of long-term debt Proceeds from issuance of bonds 
Redemption of bonds 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 year 
Cash and cash equivalents at end of year (Note 3) 

2012(Thousands of
U.S. dollars)(Note 2)

¥16,450
15,831
—
106
1,046
838
89
—
538
399
(311)
2,815
(290)
(3,959)(4,622)
1,104
1,009
31,043535(2,814)(127)(35)(2,123)
26,479¥9,474
17,040
708
251
—
—
—
(724)
(102)
144
(336)
2,756
(636)
(2,301)(2,486)
1,543
1,215
26,546559(2,749)(669)—(4,150)19,537$115,270
207,324
8,614
3,054
—
—
—
(8,809)(1,241)
1,752(4,088)33,532(7,738)(27,996)(30,247)
18,774
14,783322,984
6,801(33,447)(8,140)—(50,493)237,705(61)
69(13,444)
232
(205)
177
—
69
(15)
20,085—(4,627)(1,316)
964

(31)
30
(18,762)
1,006
(258)
284
(367)
2,400
(14)
35
(1,979)(6)(627)(18,289)(377)
365(228,276)
12,240(3,139)3,455(4,465)29,201(170)
426(24,078)(73)(7,630)(222,521)(32,359)
23,561(21,072)
—
—
—
(7)
(77)
(772)
(30,726)(236)(3,519)45,645¥42,126(3,942)
33,627(19,337)
3,200(18,980)589(1,094)(245)(733)(6,915)(5)(5,672)
42,126¥36,454(47,962)
409,137(235,272)
38,934(230,928)
7,166(13,311)(2,981)(8,917)(84,134)(61)(69,011)
512,544$443,533

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

25

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

1. Significant Accounting Policies(a) Basis of presentation
The accompanying consolidated financial statements of Nippon Light Metal Company, Ltd. (the “Company”) and its consolidated subsidiaries areprepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by
the Company as required by the Financial Instruments and Exchange Law of Japan. The notes to the consolidated financial statements include
certain financial information which is not required under accounting principles generally accepted in Japan, but is presented herein as additional
information. The accompanying consolidated financial statements include certain reclassifications for the purpose of presenting them in a form
familiar to readers outside Japan.
(b) Principles of consolidation and accounting for investments in affiliates
The accompanying consolidated financial statements include the accounts of the Company and, with minor exceptions, companies substantiallycontrolled by the Company. All significant intercompany transactions and accounts have been eliminated in consolidation.
Investments in equity securities issued by unconsolidated subsidiaries and affiliates are accounted for by the equity method, except thatinvestments in certain unconsolidated subsidiaries and affiliates are stated at cost because the effect of application of the equity method would be
immaterial.
The difference between the cost and the underlying net assets of investments in consolidated subsidiaries or affiliates accounted for by theequity method has been allocated to identifiable assets based on fair value at the respective dates of acquisition. Any unassigned residual amount isrecognized as goodwill and amortized by the straight-line method over an estimated useful life, with the exception of minor amounts which arecharged to income in the year of acquisition.
(c) Translation of foreign currencies
All monetary assets and liabilities denominated in foreign currencies, whether long-term or short-term, are translated into Japanese yen at theexchange rates prevailing at the balance sheet date. The resulting gains and losses are included in net loss for the year.
Assets and liabilities of foreign subsidiaries and affiliates are translated into Japanese yen at the exchange rates prevailing at the balance sheet
date. Income statement accounts for the year are translated into Japanese yen using the average exchange rates during the year. The resulting
translation adjustments are accounted for as foreign currency translation adjustments, except for the minority interest portion which is allocatedto minority interests in consolidated subsidiaries.
(d) Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows comprise of cash in hand, bank deposits available for withdrawal on
demand and short-term investments with an original maturity of three months or less and which are exposed to a minor risk of fluctuation invalue.
(e) Inventories
Inventories are principally stated at cost, determined by the moving average method, except that the specific identification method is applied tocosts related to construction-type contracts. In addition, the amount of Balance Sheet is calculated by write-down method based on descent of
profitability.
(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 transition obligation is amortized by the straight-line method over a period of 12 years and unrecognized actuarial gain or loss isamortized by the declining-balance method over a period of 12 years from the year following that in which it arises, except for unrecognized costswith respect to employees who retired under the early retirement program which were fully amortized at the time 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.
(q) 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.
(r) Reclassifications
Certain reclassifications of previously reported amounts have been made to conform them to the current year’s classifications.
(s) Additional information(Adoption of the “Accounting Standard for Accounting Changes and Error Correction”)
Effective April 1, 2011, the Company and its consolidated subsidiaries have adopted the Accounting Standards Board of Japan (ASBJ) Statement
No. 24, “Accounting Standard for Accounting Changes and Error Corrections” and ASBJ Guidance No. 24, ”Guidance on Accounting Standard for
Accounting Changes and Error Corrections” issued on December 4, 2009.
Effand translation adjustments” under the previous method.

28

2. U.S. Dollar Amounts
The rate of ¥82.19 = U.S.$1, the approximate exchange rate prevailing at March 31, 2012, 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, 2011 and 2012 is summarized as follows:
2012

2011
(Millions of yen)

Cash and deposits Time deposits with maturities in excess of 3 months 
MMF included in “Other current assets” Cash and cash equivalents ¥42,073(113)
166¥42,126

2012(Thousands of
U.S. dollars)¥36,568(114)—¥36,454$444,920(1,387)—$443,533

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, 2011 and 2012 were as follows:
2012

2011
(Millions of yen)

Cost 
Unrealized gains 
Unrealized losses 
Carrying amount ¥2,842
1,966(272)¥4,536

2012(Thousands of
U.S. dollars)¥2,805
1,937(243)¥4,499$34,128
23,567(2,956)$54,739(b) Sales of available-for-sale securities
The realized gains on sales of available-for-sale securities for the years ended March 31, 2011 and 2012 were as follows:
2012

2011
(Millions of yen)

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

¥177
1
—

2012
(Thousands of
U.S. dollars)

¥284
84
2

$3,455
1,022
24

29

Notes To Consolidated Financial Statements

5. Short-Term Borrowings and Long-Term Debt
Short-term borrowings at March 31, 2012 bore interest at annual rates ranging from 0.35% to 9.18% and mainly consisted of bank loans andshort-term notes maturing at various dates within one year.
Long-term debt at March 31, 2011 and 2012 comprised the following:
2012

2011

2012

(Millions of yen)

Loans, principally from banks and insurance companies due from 2011 to 2018with interest rates ranging from 0.84% to 6.45%:
Secured 
Unsecured Loans, principally from banks and insurance companies due from 2013 to 2072
with interest rates ranging from 0.40% to 6.90%:
Secured 
Unsecured 
Unsecured 2.84% 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 
Zero coupon convertible bonds due September 30, 2016 (*1) Capital lease obligations due from 2011 to 2029 with interest rates ranging from
1.45% to 7.20% Capital lease obligations due from 2012 to 2029 with interest rates ranging from
1.45% to 7.20% Less: portion due within one year 
Total long-term debt (Thousands of
U.S. dollars)¥16,620
84,164

¥—
—

$—
—

—
—
—
2,000
499
20,054

14,358103,023
3,200
2,000
493
1,022

174,693
1,253,474
38,93424,334
5,998
12,435

2,935

—

—

—
126,272(17,634)¥108,638

3,377
127,473(24,113)¥103,360

41,0871,550,955(293,381)$1,257,574(*1) The details of the zero coupon convertible bonds due September 30, 2016 are summarized as follows:
Stock type to be issued: Issue price per stock acquisition right: Initial exercise price: 
Total issue price: Exercisable period of stock acquisition rights: 

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

A summary of assets pledged as collateral for short-term borrowings and long-term debt at March 31, 2012 is as follows:
Property, plant and equipment 
Investment securities 
Other intangible assets (Millions of yen)(Thousands of
U.S. dollars)¥44,81767
119$545,285
815
1,448(Millions of yen)(Thousands of
U.S. dollars)¥24,113
21,80624,32021,682
14,60820,942¥127,471$293,381
265,312295,900
263,803
177,735
254,800$1,550,931

The aggregate annual maturities of long-term debt outstanding at March 31, 2012 are summarized as follows:
Years ending March 31,

2013 
2014 
2015 
2016 
2017 
Thereafter 30

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, 2011 and 2012 and estimated fair value is asfollows:
2011
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 *1 Liabilities are shown in parenthesis.
*2 The current portion of long-term borrowings is included in long-term borrowings.

¥42,073
115,204¥42,073
115,204

¥ —
—

3,070
4,370
(67,268)(67,423)(22,553)(100,784)
101

1,464
4,370
(67,268)(67,423)(21,213)(101,519)
101(1,606)
—
—
—
1,340
(735)
—

2012
Carrying Value *1

Estimated Fair Value *1

Difference(Millions of yen)

(1) Cash and deposits ¥36,568(2) Notes and accounts receivable – trade 
118,043(3) Investment securities
Stocks of subsidiaries and affiliates 
3,191
Other securities 4,499(4) Notes and accounts payable-trade (69,390)(5) Short-term borrowings *2 (63,601)(6) Bonds (6,715)(7) Long-term borrowings *2 
(117,381)
10(8) Derivatives *1 Liabilities are shown in parenthesis.
*2 The current portion of long-term borrowings is included in long-term borrowings.

¥36,568
118,043

¥ —
—

1,197
4,499
(69,390)(63,601)(6,679)(118,175)
10(1,994)
—
—
—
36
(794)
—

31

Notes To Consolidated Financial Statements

2012
Carrying Value *1

Estimated Fair Value *1

Difference(Thousands of U.S. dollars)(1) Cash and deposits $444,920$444,920$ —(2) Notes and accounts receivable – trade 
1,436,221
1,436,221—(3) Investment securities
Stocks of subsidiaries and affiliates 
38,825
14,564(24,261)
Other securities 
54,73954,739—(4) Notes and accounts payable-trade (844,263)(844,263)—(5) Short-term borrowings *2 (773,829)(773,829)—(6) Bonds (81,701)(81,263)438(7) Long-term borrowings *2 
(1,428,166)(1,437,827)(9,661)122122—(8) Derivatives *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. In addition, zero coupon convertible bonds due September 30,
2016 are included in Bonds.
(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 stocks of ¥16,568 million and ¥17,024 million ($207,130 thousand) as of March 31, 2011 and 2012 are not included in “(3)Investment securities” because no quoted market prices are available and it is extremely difficult to measure the fair value.
3. The redemption schedule for receivables and marketable securities with maturities at March 31, 2011 and 2012 is as follows:32Due within
one year

Cash and deposits Notes and accounts receivable-trade 
Investment securities
Held-to-maturity securities
Government and municipal bonds 
Corporate debt securities 

¥—
—

¥—
—

¥—
—

13
10
¥157,218

12
—
¥ 12

9
—
¥ 9

1
—
¥ 1

2012
Due after one year but
Due after five years but
within five years
within ten years(Millions of yen)

Due after
ten years¥ 36,517
118,043

¥—
—

¥—
—

¥—
—

2
–
¥154,562

7
10
¥17

8
—
¥ 8

—
—
¥—

Due within
one year

Cash and deposits Notes and accounts receivable-trade 
Investment securities
Held-to-maturity securities
Government and municipal bonds 
Corporate debt securities 

Due after
ten years¥41,991
115,204

Due within
one year

Cash and deposits Notes and accounts receivable-trade 
Investment securities
Held-to-maturity securities
Government and municipal bonds 
Corporate debt securities 

2011
Due after one year but
Due after five years but
within five years
within ten years(Millions of yen)

2012
Due after one year but
Due after five years but
within five years
within ten years(Thousands of U.S. dollars)

Due after
ten years$444,300
1,436,221

$—
—

$—
—

$—
—

24
—
$1,880,545

85
122
$207

97
—
$ 97

—
—
$—

4. The redemption schedule for bonds and long-term borrowings at March 31, 2011 and 2012 is as follows:2011
Due after one year but
within five years(Millions of yen)

Due within
one year

Bonds Long-term borrowings ¥ —16,979¥16,9792012
Due after one year but
within five years(Millions of yen)

Due within
one year

Bonds Long-term borrowings ¥—23,323¥23,323
Due within
one year

Bonds Long-term borrowings ¥ 2,000
74,566¥76,566¥3,020
77,833¥80,8532012
Due after one year but
within five years(Thousands of U.S. dollars)$—
283,769$283,769$36,744
946,989$983,733

Due after
five years¥20,553
9,239¥29,792
Due after
five years¥3,693
16,225¥19,918
Due after
five years$44,932
197,409$242,341

33

Notes To Consolidated Financial Statements

7. Other Comprehensive Income
Each component of other comprehensive income for the year ended March 31, 2012 was as follows:
2012(Millions of yen)

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 

2012(Thousands of
U.S. dollars)

¥66
(66)
0
121
121

$ 803
(803)
0
1,472
1,472

(351)
256
(95)
37
(58)

(4,271)
3,115(1,156)
450
(706)

7

85

(84)
¥(14)(1,022)$ (171)

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, 2011 and 2012 are summarized as follows:
2012

2012
(Thousands of
U.S. dollars)¥(36,079)
16,678(19,401)
—
3,216
(412)
¥(16,597)$(438,971)
202,920(236,051)—
39,129(5,013)$(201,935)

2011(Millions of yen)

Projected benefit obligation 
Fair value of plan assets 
Unrecognized transition obligation 
Unrecognized actuarial loss 
Unrecognized prior service cost 
Accrued pension and severance cost ¥(37,392)
16,634(20,758)
1,112
3,667
(459)
¥(16,438)

The net pension and severance costs related to retirement benefits for the years ended March 31, 2011 and 2012 are summarized as follows:
2012

2011

2012
(Thousands of
U.S. dollars)(Millions of yen)

Service cost Interest cost Expected return on plan assets 
Amortization of transition obligation 
Amortization of unrecognized actuarial gain 
Amortization of prior service costs 
Net pension and severance costs ¥2,320
527
(276)
1,112
629
(47)
¥4,265¥2,230
683
(358)
1,113
614
(56)
¥4,226$28,227
6,412(3,358)13,5307,653(572)$51,892

Assumptions used in calculating the above information are summarized as follows:
2011

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 
Period of amortization of transition obligation 

34

2.00%
Mainly 2.5%
Straight-line basis
Mainly 15 years
Mainly 12 years
12 years

2012

2.00%
Mainly 2.0%
Straight-line basis
Mainly 15 years
Mainly 12 years
12 years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 40.7% for the years ended March 31, 2011 and 2012.
On December 2, 2011, the “Act for Partial Revision of the Income Tax Act etc. for the Purpose of Creating Taxation System Responding toChanges in Economic and Social Structures” (Act No. 114 of 2011) and the “Act on Special Measures for Securing Financial Resources Necessary
to Implement Measures for Reconstruction Following the Great East Japan Earthquake” (Act No. 117 of 2011) were promulgated in Japan. Under
these revisions to corporate tax law, corporation tax rates will be reduced and a surtax, the Special Reconstruction Corporation Tax, will be
imposed.
The normal effective statutory tax rate will be reduced from 40.7% to 38.0% for temporary differences expected to be settled or realized in the
period between fiscal years beginning April 1, 2012 and April 1, 2014, and to 35.6% for temporary differences expected to be settled or realized infiscal years beginning April 1, 2015 thereafter. The effect of this change was to decrease deferred tax assets by ¥1,848 million ($22,484 thousand),decrease deferred tax liabilities for land revaluation surplus by ¥64 million ($779 thousand), increase income taxes-deferred by ¥1,867 million($22,716 thousand), and increase net unrealized gains on securities by ¥83 million ($1,010 thousand) in the consolidated financial statements asof and for the year ended March 31, 2012.
Significant components of deferred tax assets and liabilities at March 31, 2011 and 2012 were as follows:
2012

2011
(Millions of yen)

Deferred tax assets:
Tax loss carry forwards 
Accrued pension and severance costs 
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:
Negative Goodwill Revaluation gain on subsidiaries 
Unrealized gain on securities 
Other Total deferred tax liabilities 
Net deferred tax assets 

2012(Thousands of
U.S. dollars)¥21,495
5,945
2,168
2,220
1,932
10,50244,262(19,482)
24,780¥18,398
5,709
2,593
2,037
1,670
10,631
41,038(19,619)
21,419$223,847
69,461
31,54824,784
20,319129,347
499,306(238,703)
260,603(1,844)(1,276)(709)(915)(4,744)¥20,036(1,282)(1,134)(640)(748)(3,804)¥17,615(15,598)(13,797)(7,787)(9,101)(46,283)$214,320

Deferred tax assets and liabilities that comprise net deferred tax assets are included in the accompanying consolidated balance sheets asfollows:
2012

2011(Millions of yen)

Deferred tax assets (current assets) Deferred tax assets (investments and other assets) 
Other long-term liabilities ¥ 5,367
15,227(558)¥ 6,321
11,794(500)

2012(Thousands of
U.S. dollars)$ 76,907
143,497(6,083)

In addition to the above, the Company recorded deferred tax liabilities on land revaluation surplus of ¥516 million and ¥452 million ($5,499
thousand) at March 31, 2011 and 2012 separately.
A reconciliation of the differences between the statutory income tax rate and the effective income tax rate for the year ended March 31, 2011
and 2012 were summarized as follows:
2011

Statutory income tax rate Increase (decrease) in taxes resulting from:
Permanent non-deductible expenses 
Amortization of goodwill 
Equity in earnings of affiliates 
Decrease of valuation allowance 
Adjustment on deferred tax assets due to change in income tax rate 
Other Effective income tax rate 

2012

40.7%

40.7%

1.3
1.1
(0.7)
(11.9)
—
(4.2)
26.3%

2.5
4.0
(2.7)
—
19.7
(1.7)
62.5%

35

Notes To Consolidated Financial Statements

10. Appropriations of Retained Earnings
The following appropriation was approved at the ordinary general meeting of shareholders of the Company held on June 28, 2012:(Millions of yen)(Thousands of U.S. dollars)¥1,088$13,238

Cash dividends 

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.
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, 2011 and2012 were ¥4,798 million and ¥4,902 million ($59,642 thousand), respectively.
14. Contingent Liabilities
Contingent liabilities at March 31, 2012 amounted to ¥326 million ($3,966 thousand) for loans guaranteed and other guarantees given in theordinary course of business.
15. Net Income Per Share
Net income per share for the years ended March 31, 2011 and 2012 were summarized as follows:2011

Net income Netincome(Millions of yen)

Weighted
averagenumber ofshares(Thousands of shares)

Net
incomeper share(Yen)¥11,040

544,012¥20.29Net
income(Millions of yen)

Weighted
averagenumber ofshares(Thousands of shares)¥2,856543,9342012

Net income 

Diluted net income was not presented because the effect of convertible bonds would be anti-dilutive.

36

Net income per share(Yen)(U.S. dollars)

¥5.25

$0.06

16. 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.
Reportable segment information for the years ended March 31, 2011 and 2012 was as follows:
Aluminumingot andchemicals

2011
The reportable segments
Aluminum
FabricatedAluminum
sheet andproducts
foil, powder
extrusions
and others
and paste(Millions of yen)

Adjustment(Note 1)

Consolidated

Net sales
Customers ¥107,397¥77,624¥127,929¥116,483¥—¥429,433
45,504
20,4988,246
698(74,946)—
Intersegment 
Total 152,901
98,122
136,175
117,181(74,946)
429,433¥6,783¥5,078¥5,264¥10,245¥(2,646)¥24,724
Operating profit 
Segment assets ¥104,354¥82,165¥109,710¥104,279¥14,377¥414,885
Depreciation and amortization ¥3,506¥4,059¥3,447¥4,749¥70¥15,831
Amortization of goodwill 
¥—
¥—
¥—
¥442
¥—
¥442
Loss on impairment of fixed assets 
¥106
¥—
¥—
¥—
¥—
¥106
Capital expenditures ¥3,374¥3,629¥2,194¥6,062¥104¥15,363(Note). Adjustments amounts are as follows.
1) Adjustments of ¥(2,646) million in segment profit are general corporate expenses.
2)	Adjustments of ¥14,377 million in segment assets include ¥(15,828) million in the elimination of transactions between segments and¥30,205 million in corporate assets.
3) Adjustments of ¥70 million in depreciation and amortization expenses have primarily to do with corporate assets.
4) Adjustments of ¥104 million for capital expenditures are the increase in corporate assets.

Aluminumingot andchemicals

Net sales
Customers Intersegment 
Total Operating profit 
Segment assets 
Depreciation and amortization 
Amortization of goodwill 
Loss on impairment of fixed assets Capital expenditures ¥ 99,560
40,590140,150¥ 5,227¥113,119¥ 3,845¥—¥
48¥ 8,702

2012
The reportable segments
Aluminum
FabricatedAluminum
sheet andproducts
foil, powder
extrusions
and others
and paste(Millions of yen)¥70,618
20,05590,673¥ 1,569¥66,324¥ 4,025¥ —¥ —¥ 4,526¥127,972
8,909
136,881¥ 6,392¥130,313¥ 3,418¥—¥ 146¥ 3,974¥104,859
722
105,581¥ 3,402¥103,429¥ 5,675¥ 938¥57¥ 5,827

Adjustment(Note 1)

Consolidated¥—(70,276)(70,276)¥ (2,925)¥ 9,486
¥
77
¥
—
¥
—
¥ 138¥403,009—
403,009¥ 13,665¥422,671¥ 17,040¥ 938¥ 251¥ 23,167

37

Notes To Consolidated Financial Statements

Aluminumingot andchemicals

Net sales
Customers Intersegment 
Total Operating profit 
Segment assets 
Depreciation and amortization 
Amortization of goodwill 
Loss on impairment of fixed assets Capital expenditures $1,211,340
493,855
1,705,195$ 63,597$1,376,311$ 46,782
$
—
$
584
$ 105,877

2012
The reportable segments
Aluminum
FabricatedAluminum
sheet andproducts andfoil, powder
extrusions
othersand paste(Thousands of U.S. dollars)$ 859,204
244,008
1,103,212$ 19,090$ 806,959$ 48,972$—$—$ 55,067$1,557,026
108,395
1,665,421$ 77,771$1,585,509$ 41,586$—$ 1,776$ 48,351$1,275,812
8,785
1,284,597$ 41,391$1,258,413$ 69,047$ 11,413$
694$ 70,897

Adjustment(Note 1)

$—(855,043)(855,043)$ (35,588)$115,417
$
937
$
—
$
—
$ 1,679

Consolidated$4,903,382—
4,903,382$ 166,261$5,142,609$ 207,324$ 11,413$ 3,054$ 281,871(Note 1). Adjustments amounts are as follows.
1) Adjustments of ¥(2,925) million ($(35,588) thousands) in segment profit are general corporate expenses.
2)	Adjustments of ¥9,486 million ($115,417 thousands) in segment assets include ¥(17,560) million ($(213,651) thousands) in theelimination of transactions between segments and ¥27,046 million ($329,068 thousands) in corporate assets.
3) Adjustments of ¥77 million ($937 thousands) in depreciation and amortization expenses have primarily to do with corporate assets.
4) Adjustments of ¥138 million ($1,679 thousands) for capital expenditures are the increase in corporate assets.
(Note 2). Effective April 1, 2011, Nikkei Kenzai Kogyo Co., Ltd., its 5 subsidiaries and Nikkei Technology Center Co., Ltd., which were previously
included in the “Fabricated products and others” segment are newly included in the “Aluminum sheet and extrusions” segment.
This change reflects the fact that the above subsidiaries are under the umbrella of Nikkeikin Kakoh Kaihatsu Holdings Company, Ltd., which
was established in March 2011 for the purpose of accelerating decision making, ensuring efficient distribution of management resources andfurther strengthening the competitiveness of the Extrusions and Extrusion Fabrications business.
Geographical sales for the year ended March 31, 2011 and 2012 were summarized as follows:
Japan

2011
Other
(Millions of yen)

Total

Japan

2012
Other
(Millions of yen)

Total

Japan

2012
Other
(Thousands of U.S. dollars)

Total¥349,321¥80,112¥429,433¥328,611¥74,398 ¥403,009$3,998,187$905,195 $4,903,382
As more than 90% of property, plant and equipment at March 31, 2011 and 2012 were in Japan, the disclosure of geographical property, plantand equipment information has been omitted.
17. Subsequent Events(Incorporation of Holding Company through Sole-Share Transfer)
The Company passed a resolution at a meeting of the Board of Directors on May 15, 2012 to incorporate “Nippon Light Metal Holdings Company,
Ltd.” (the “Holding Company”) through a sole-share transfer. The resolution was approved at the 105th Ordinary General Meeting of Shareholders
held on June 28, 2012.
1. Purpose of incorporation of the Holding Company
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 scales 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.
The Holding Company will take on the role of proposing management strategies as the company that oversees the whole group within a new
structure for corporate governance, and will distribute management resources effectively to its respective domestic and overseas businesses inorder to meet the developing and diversified demand for aluminum and aluminum-related materials. It will increase corporate value throughthese clearly delineated business activities, and contribute to improving people’s lives by supporting customers in various industrial fields.
As the Company will become a wholly owned subsidiary company of the Holding Company as a result of the share transfer, the Company
will be de-listed from the Tokyo Stock Exchange and the Osaka Securities Exchange, and the stock of the Holding Company will be allocated tothe shareholders of the Company. The Company plans to apply to newly list the shares of the Holding Company on the Tokyo Stock Exchange
and the Osaka Securities Exchange. The listing date, depending on the review of the Tokyo Stock Exchange and the Osaka Securities
Exchange, is scheduled to be October 1, 2012, registration date for the incorporation of the Holding Company (effective date of the sharetransfer).

38

2. Summary of share transfer(1)Share Transfer Schedule
Record date for the annual shareholders meeting:Board of Directors meeting for the approval of the preparation of
the Share Transfer plan:
Annual shareholders meeting for the approval of the preparation of
the Share Transfer plan:De-listing date:

Saturday March 31, 2012
Tuesday May 15, 2012

Thursday June 28, 2012
Wednesday September 26, 2012(scheduled date)
Registration date for the incorporation of the Holding Company
Monday October 1, 2012
(effective date of the Share Transfer):(scheduled date)Listing date for the Holding Company’s shares:
Monday October 1, 2012(scheduled date)* The (above) schedule may be changed, if necessary, in the course of completing the share transfer procedures ordue to other reasons.

(2) Share Transfer Method
A sole-share transfer with the Company becoming a wholly owned subsidiary company of the Holding Company and the Holding Company
becoming the wholly owning parent company incorporated through the share transfer.
(3) Allocation of Shares by Share Transfer (Share Transfer Ratio)
Nippon Light Metal Holdings Company, Ltd.
Nippon Light Metal Company, Ltd(Wholly owning parent company)(Wholly owned subsidiary company)
Allocation ratio
111) Allocation ratio of the Holding Company’s shares:
The shares of the Holding Company will be allotted to the shareholders of record in the final shareholders list asof the day immediately prior to the effective date of the share transfer at a rate of 1 share of the Holding Company
for 1 share of the Company held by the shareholders.
2) Share unit number:
The number of shares constituting one unit of the shares of the Holding Company will be one hundred (100)shares.
		 As a result, the share unit number of the Holding company will be reduced to 100 from 1,000 which is theshare unit number of the Company.
3) Basis of calculation of the allocation ratio:
To prioritize the fair treatment of Company shareholders, one share of common stock of the Holding Company
will be allocated per share of common stock of the Company in accordance with the share transfer to ensure theshareholder composition of the Holding Company is the same as that of the Company currently.
4) Rules, method and basis of calculation by third party institution:
No calculation is made by any third party institution because of the reason in 3) “Basis of calculation of theallocation ratio” above.
5) Number of new shares to be delivered through the share transfer (scheduled):
545,126,049 shares		 The (above) number of new shares to be delivered by the Holding Company may fluctuate if the total number
of issued shares of the Company changes before the share transfer is effective.
		 With respect to treasury shares held by the Company, common stock of the Holding Company will beallocated in accordance with the share transfer ratio. As a result, the Company will temporarily hold the common
stock of the Holding Company, and the method of disposal thereof will be announced when determined.
3. Details on Holding Company (tentative)(1)Company Name:
Nippon Light Metal Holdings Company, Ltd.
(2) Address:
2-20, Higashi-Shinagawa, 2-chome, Shinagawa-ku, Tokyo(3) Name of representative: Takashi Ishiyama(4) Primary business:
Management and administration of subsidiary company, and relevant operations(5) Paid-in-Capital:¥39,085,000,000(6) Fiscal year end:
March 31
(7) Net assets:
Not yet determined(8) Total assets:
Not yet determined
4. Summary of accounting treatment
This transaction will be treated as a “transaction under common control” under corporate accounting procedures, and, therefore, will have noeffect on gain and loss. In addition, the transaction will not give rise to goodwill.
5. Future outlook
The Company will become a wholly owned subsidiary of the Holding Company by the share transfer. Accordingly, the business results of theCompany will be reflected in the consolidated business results of the Holding Company, its wholly owning parent company.
The effect of this share transfer on the Company’s business performance will be immaterial.
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 M.C. 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%)
Nonfemet International(China-Canada-Japan)
Aluminium Co., Ltd.
Shenzhen, China
Phone: 86-755-2661-1569
Extrusion(18%)

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%)
Thai Nikkei Trading Co., Ltd.
ThailandPhone: 66-2726-9001
Aluminum alloys, scrap(100%)

Toyal Zhaoqing Co., Ltd.
Zhaoqing, China
Phone: 86-758-3602-080
Aluminum paste(90%)
Toyo Aluminium Ekco Shoji(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, 2012)41

Directors And Officers

Directors

Officers

President
Representative Director

President
Chief Executive Officer

Takashi Ishiyama

Takashi Ishiyama

Directors

Executive vice president

Tsuyoshi Nakajima
Makoto Fujioka
Mitsuru Ishihara
Ichiro Okamoto
Toshihide Murakami
Atsushi Inoue

Tsuyoshi Nakajima

President and Representative Directorof Nikkeikin Kakoh Kaihatsu Holdings
Company, Ltd.

Hiroshi Yamamoto
President and CEO of Toyo Aluminium
K.K.

Koji Ueno
President and CEO of Nippon FruehaufCo., Ltd.

Hidetane Iijima*
Masato Ono*
* Outside Director

Auditors
Standing Statutory Auditors

Tadashi Asahi
Nobuo Matsumoto
Outside Statutory Auditors

Yuzuru Fujita
Katsuo Wajiki
Yasuo Yuki

Supervision of General Affairs Dept.,
IR & Public Relations, Accounting &Finance Dept., Group Metal Center andPurchasing & Logistics Dept.
Senior Executive Officers

Makoto Fujioka
General Manager of CSR Group, In
Charge of Compliance, Supervision of
Auditing Office, Personnel Dept., andLegal Dept., In Charge of Safety, In
Charge of Environment and SpecificProjects for Group Sales, Supervisionof Osaka /Nagoya Regional Office

Mitsuru Ishihara

Executive Officers

Toshihide Murakami
Supervision of Kambara Complex,
Supervision of Capacitor Foil, andLandscape Products Div.

Takashi Hara
Supervision of Heat Exchanger Div.,
Divisional Manager of Metal & Alloyand Shaped Parts

Yasunori Okamoto
General Manager of Planning Dept., In
Charge of Overseas Strategy,
Supervision of Tomakomai Complex

Officers

Hirokazu Takatoku
General Manager of Legal Dept.,
Deputy General Manager of CSRGroup, General Manager ofCompliance Office, CSR Group

Supervision of Chemicals Div. andRolled Product Div.

Kotaro Yasuda

Ichiro Okamoto

Minoru Sotoike

General Manager of Technology &Development Group, Supervision ofStrategic Committee for ProductCommercialization and Business
Development, General Manager ofCentral Product Safety & Quality
Assurance Div.

Divisional Manager of Chemicals

General Manager of Accounting &Finance Dept.

Yasuhiro Sai
Divisional Manager of Rolled Products

Shinichi Shinohara
Divisional Manager of Heat Exchanger

Hideki Amimura
General Manager of Group Metal
Center and Purchasing & Logistics
Dept.

Takayuki Tsuchida
General Manager of Group Technology
Center of Technology & Development
Group

42

(As of July 1, 2012)

Corporate Data

ProfileCORPORATE DATA

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

Head Office

Major Shareholders

NYK Tennoz Building
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
http://www.nikkeikin.co.jp
Phone: 81-3-5461-9211
Fax: 81-3-5461-9344(Ratio of Stock Holding)Establishedand food products industries.
By carrying on development of new applications for aluminum and aluminum materials, theMarch 30, 1939

NLM Group is to continue to support customers in wide-ranging industrial sectors and contribute toPaid-In Capital

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

¥39,085 million
Shares of Common Stock

Authorized: 1,600,000,000
Issued: 545,126,049

Consolidated Financial Highlight

Number of Shareholders

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

53,2862012

2011

Millions of yen

For the year:
Net sales 
Operating profit 
Net income Thousands of
U.S. dollars¥429,433 ¥403,009 $4,903,382
24,724
13,665
166,261
11,0402,856
34,749At year-end:
Total assets 
Net assets 
Short-term borrowings and long-term debt,
including bonds and capital lease obligation 

Net Sales
800

2012

414,885
104,757

422,671
108,849

5,142,609
1,324,358

193,695

191,074

2,324,784

Operating Profit
35

Stock Exchange Listings

Tokyo, Osaka
Transfer Agent of Common Stock

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

June 28, 2012

Total Assets

Japan Trustee Services Bank, Ltd.
(trust accounts)(11.4%)The Master Trust Bank of Japan, Ltd.
(trust accounts)(5.1%)The Dai-ichi Mutual Life Insurance Co.
(3.7%)
Japan Trustee Services Bank, Ltd.
(trust accounts 9)(2.9%)
Asahi Mutual Life Insurance Co.
(2.8%)The Light Metal Educational
Foundation, Inc.
(2.7%)
Nikkei-Keiyu-Kai(2.7%)
Mizuho Corporate Bank, Ltd.
(2.1%)
Namekawa Aluminium Co., Ltd.
(1.6%)
Retirement Benefit Trust in
Mizuho Trust & Banking Co., Ltd.
Mizuho Corporate Bank, Ltd. account;
Trust & Custody Services Bank, Ltd.
as a Trustee of Retrust(1.6%)

600

30
25

600

(As of March 31, 2012)

450

20
15

400

10

300

5
0

200

Cautionary Statement

150

-5

This annual report contains various projections and estimates. Important factors that could alter these projections and estimates include-10
02007 2008 2009 2010 2011 2012

Billions of yen

Years ended March 31-15changes in the balance of aluminum supply and demand, fluctuations in the price of aluminum ingot and foreign exchange rates, as2007 2008 2009 2010 2011 2012

Billions of yen

Years ended March 3102007 2008 2009 2010 2011 2012

Billions of yen

As of March 31

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 COMPANY, LTD. ANNUAL REPORT 2012

A N N UA L R E P O RT

2012

Nippon Light Metal Company, Ltd.

Year ended March 31, 2012

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

Printed in Japan