Meeting Next-Generation Needs for Aluminum

Profile

Nippon Light Metal Company, Ltd. (NLM), Japan’s only fully integrated
aluminum manufacturer, has led the industry for 61 years. NLM’soperations include converting bauxite into alumina; generating electric
power for aluminum plants; smelting aluminum from alumina;
manufacturing, distributing, and marketing finished and semifinishedaluminum and nonaluminim-based products; and producing and selling
related industrial chemicals.
As part of its growth strategy, in October 1999 NLM merged withconsolidated subsidiary Toyo Aluminium K.K. (Toyal), which specializes in
the production and sales of aluminum foil, paste and powder; alloy
powders; high-purity aluminum nitride powder; and aluminum
intermetallic compound. Through this merger, NLM expects to enhance theoperations of both companies, allowing us to derive substantial benefits
from complementary areas of business and to provide a broader lineup of
products to customers throughout Japan, as well as to take advantage ofbusiness expansion opportunities throughout Asia.

Contents
1
2
4
8
10
12
14
15
16
17
26
27
28
29

Cover:The Kambara complex, locatednear Mt. Fuji, is the only oneof its kind in Japan.

28

Nippon Light Metal Company, Ltd.

Consolidated Six-Year Summary
To Our Shareholders
Meeting Next-Generation Needs for Aluminum
Review of Operations
Financial Review
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Report of Independent Accountants
Overseas Network
Directors and Officers
Corporate Data

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

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

Thousands of
U.S. dollars

Millions of yen
1995

1996

1997

1998

1999

2000

2000

For the year:
Net sales ............................................ ¥607,237 ¥608,804 ¥626,787 ¥617,595 ¥569,036 ¥549,194 $5,173,754
Operating profit (loss) ...................... 14,288 13,430 16,727(574) (4,153)
2,150
20,254
Net income (loss) ............................. (5,060)
130 (1,516) (11,846) (19,248) (14,096) (132,793)
At year-end:
Total assets ........................................ 644,219 682,000 668,954 716,753
Shareholders’ equity.......................... 147,000 146,756 144,405 131,836
Short-term borrowings andlong-term debt, includingcommercial paper (Note 4) ............ 257,314 274,628 279,596 333,052

640,989 605,346
93,481 100,509

5,702,741
946,858

340,445 310,891 2,928,789

Per share data (yen and dollars):
Net income (loss) ............................. ¥ (9.43) ¥ 0.24 ¥ (2.82) ¥ (22.07) ¥ (40.98) ¥ (31.01) $Cash dividends ..................................
2.00
2.00
2.00
2.00
2.00
2.00
Shareholders’ equity.......................... 273.83 273.38 269.00 245.59
232.18 198.45(0.29)(0.02)
1.87

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

1.87
0.62

795 ¥
446

680 ¥
370

690 ¥
367

480 ¥
133

199 ¥
112

199 $
66

Note: U.S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥120.55=U.S.$1.00. See Note 2 of the Notes to the Consolidated
Financial Statements.

Net Sales (Billions of yen)

Operating Profit (Loss) (Billions of yen)

Total Assets (Billions of yen)

750

20

750

600

15

600

450

10

450

300

5

300

150

0

150

0

0

–5
1995 1996 1997 1998 1999 2000
Years ended March 31

1995 1996 1997 1998 1999 2000
Years ended March 31

1995 1996 1997 1998 1999 2000
As of March 31

Nippon Light Metal Company, Ltd.

1

To Our Shareholders

Operating Results
During fiscal 1999, ended March 31, 2000, the Japanese
economy was characterized by government economic
stimulus measures centering on public-sector capital andprivate housing investment. Furthermore, robust
economic activity in the United States began supporting
the domestic stock market. Despite such positive signs
amid Japan’s long-lived economic stagnation, labormarket uncertainties continued to sap private
consumption levels, as a result of which a full-fledged
recovery failed to occur.
During the year, domestic aluminum demand rose forthe first time in three years, spurred by a recovery inresidential housing starts. Demand from the automotive
and electrical equipment sectors was also firm. Despite
these positive indicators, price competition intensified.
Japanese demand for aluminum can be broadly divided
into two major segments: construction-related and thetransportation industry. In fiscal 1999, demand rose 0.3%
in the former category and 2.5% in the latter.
Under these conditions, Nippon Light Metal Company,
Ltd. (NLM), saw consolidated net sales dip 3.5% to¥549.2 billion. However, owing to successful efforts tocurtail fixed costs, the Company posted operating income
for the first time in three years, amounting to ¥2.2 billion.
Affecting profitability, however, was a decline in the selling
price of building materials. Furthermore, performance
suffered in the area of computer memory devices—previously a growth area—owing to a simultaneous
decrease in sales volumes and unit sales prices on
aluminum substrates for memory disks. Net sales andprofits suffered, with the Company posting an
extraordinary loss and withdrawing its operations incomputer memory devices. As a result, the Company
posted a consolidated net loss of ¥14.1 billion. Althoughnet income per share was negative ¥31.01, the Company
elected to maintain dividends per share at ¥2.00.
Our Merger with Toyal
Following its February 1998 acquisition of a 50% stake in
Toyo Aluminium K.K. (Toyal)—the nation’s largest
manufacturer of aluminum foil and one of the world’s
largest specialized manufacturers of aluminum paste andpowder—in October 1999 NLM merged with Toyal. Prior

2

Nippon Light Metal Company, Ltd.

to the merger, a newly formed sales company took overthe sales, R&D, procurement and management divisionsof the former Toyal. Hence, through the merger, NLM
effectively absorbed Toyal’s manufacturing assets.
One aim of the merger, which is part of NLM’s growthstrategy, was to enable us to produce higher-value-added
products. At the same time, this merger will increase
NLM’s prominence as Japan’s only integrated
manufacturer of aluminum products. In addition, we
expect our ability to provide an even broader productlineup—specifically in growth areas—to positively affect
the Company in terms of customer reliability and new
business development, both of which will boost
profitability. The merger will also help improve theutilization ratio at our Nagoya rolling plant and our
Kambara casting and electrolytic foil plants, effectively
lowering costs throughout the foil-production process.
In August 2000, NLM will obtain the remainder of theoutstanding shares in Shin Nikkei Company, Ltd., inexchange for newly issued shares in NLM, making Shin
Nikkei a wholly owned subsidiary. A major reason for thisdecision was to reflect NLM’s management decisions
more quickly in the field of construction materials andspeed the Company’s recovery in this segment.
Outlook for Fiscal 2000
In fiscal 2000, NLM expects the Japanese economy torecover slightly. However, private-sector demand isunlikely to recover fully. Nevertheless, we believe thelong-term prospects for the aluminum industry arepromising. Environmental concerns are promoting theincreased use of aluminum in consumer products, andwe therefore expect slightly higher demand for aluminumin the automotive, electrical equipment and electronics
and industrial machinery sectors.
Conversely, a decrease in new housing starts will likely
sap demand for aluminum building materials, and theincreased use of aluminum in truck chassis will require
some time. Despite the continuing difficulties we foresee
for the aluminum industry, the NLM Group will continue
to push through reforms designed to enhance
management speed and decision-making effectiveness. At
the same time, we will maintain our R&D focus ontechnologies and products that anticipate market needs.

For fiscal 2000, NLM has targeted consolidated net
sales of ¥540 billion, down 2% from the fiscal 1999 level.
At the same time, we anticipate operating income of¥11.0 billion and net income of ¥1.5 billion, improving¥9.0 billion and ¥15.5 billion, respectively.
To achieve these goals, we believe the Company must
address three key management issues. First, we mustensure that our operations generate stable profits andconcentrate on new growth areas. NLM believes that its
core competence lies in the technologies and the R&D
capacity to develop products from materials into finishedproducts. We will maximize these strengths by
anticipating market needs and being first in themarketplace with processed aluminum products ofexceptional quality.
Second, we will reorganize business areas that are
unprofitable or that generate low profits. In particular, we
will raise profitability in these areas by reducing theamount of capital they require and curtailing the costs
they incur.
Third, NLM will improve the functional performanceof its management system to accelerate decision
making and ensure the allocation of authority
and responsibility. To accomplish this goal, we
are substantially reducing the size of the Boardof Directors and creating an executive
committee to implement the Board’s
decisions.
For the NLM Group, we maintain along-term goal of attaining a 7%
return on capital employed(ROCE) as the result of ourmanagement restructuring efforts.
Within three years, we aim to makesignificant progress toward this level,
achieving ROCE of 5% and improving
our debt-to-equity ratio from 70:30
to 65:35.

Through these efforts, NLM aims to improve its rate of
return to stakeholders by maintaining steady dividendlevels. Furthermore, we will endeavor to keep lines ofcommunications open and sincerely evaluate suggestions
from our stakeholders. We ask for your continued
involvement and thank you for your cooperation to date.
June 29, 2000

Yukoh Masuda
Chairman and Representative Director

Kazuo Matsui
President and Chief Executive Officer

Yukoh Masuda (left)
Chairman and Representative Director
Kazuo Matsui (right)
President and Chief Executive Officer

Nippon Light Metal Company, Ltd.

3

Meeting Next-Generation Needs for Aluminum

Aluminum and the NLM Group:
Fulfilling the Promise of the 21st Century
Lightweight and recyclable, aluminum can be highly
cost effective. NLM is confident that aluminum will play
an instrumental role in saving the earth’s depleting
resources. The NLM Group’s mission is to help protect
the environment by providing aluminum and related
products. Our future business will center on materials
that fulfill this mission.
Protecting the environment in the coming century isessential, and society counts on aluminum to play a key
role. Consistent with our mission, we are revamping ourmanagerial structure to accommodate the growth anddevelopment potential of the aluminum business.
Faced with the great expectations for aluminum in the
21st century, we are well aware of the work that remains
to meet this challenge. At the beginning of fiscal 1999, aspart of our preparations, we initiated such restructuring
actions as reducing fixed assets and reorganizing ourbusiness and managerial structures.
The entire staff at NLM—from top executives ondown—consciously strives to improve business throughenhanced speed, effectiveness and performance. We
are convinced that these developments will raise Group
profitability, ultimately benefiting shareholders,customers, our workforce and society throughout ouroperating region.

4

Nippon Light Metal Company, Ltd.

Business Restructuring
We recognize that, initially, restructuring efforts requirethat we bolster returns in unprofitable and lowperforming sectors as well as reduce capital
expenditures. To accomplish this restructuring, we haveestablished a strategy comprising the following six
components.
1. Full Ownership of Shin Nikkei
In August 2000, we purchased all outstanding stock in
Shin Nikkei Company, Ltd.—a building materials
subsidiary traded on the Second Section of the Tokyo
Stock Exchange—forming a wholly owned subsidiary.
Revisions in October 1999 to the portion of Japan’scommercial law governing subsidiary holdings haveenabled us to offer newly issued shares in NLM in
exchange fo those of Shin Nikkei at a ratio of 1:0.86.
As a wholly owned subsidiary, we expect strong
management to give rise to rapid increases in thebusiness efficiency of Shin Nikkei. Possibilities for shared
managerial and administrative functions should translate
into operating profitability in fiscal 2000.
2. Strengthening Our Extrusion Business
The first phase of our strategy to boost profitability inthe aluminum extrusion sector is to expand business byfocusing on particularly promising markets—automobiles,
transportation and information technology.
Our foremost objective is to unify the structure of ourrelated companies in this sector. Pursuant to this goal, in

Inside an NLM extrusion plant

January 2000 we formed a fabricated sheet and extrusion
products division by combining what was previously an
extrusion subsidiary—Nikkei Extrusions Co., Ltd.—with
the fabricated product lines of NLM’s extrusion andmanufacturing divisions.
Currently, NLM operates 33 extrusion lines. Consistent
with our decision to reduce this number by one-third, we
have begun implementing plans to close down extrusionlines at our Osaka Works and Nikkei Extrusions’
Yamagata Works. In fiscal 1999, we booked an
extraordinary loss of ¥2 billion to cover the costs ofdisposing of equipment when closing down the latter line
in fiscal 2000. This closure will reduce production costsby eliminating excess capacity and improving plantutilization ratios.
3. Joint Venture with Sumitomo Light Metal inLandscape EngineeringWith regional governments under financial strain,
reduced public works spending has stifled the businessperformance of construction companies, and landscapeengineering projects have become essential income
generators. Given these severe business conditions, wehave joined forces with a competitor—Sumitomo Light
Metals—combining its urban engineering division
with our landscape engineering division to form ajoint venture. Such an arrangement offers efficiencies
in overlapping areas, through staff reductions,streamlined distribution channels and shared managerial,planning and construction functions. Sumikei-Nikkei
Engineering Co., Ltd., will begin operations in August
2000 with a staff of 280 and prospective annual net
sales of ¥25 billion.
4. NLM Pulls Out of the Aluminum Memory
Disk Business
NLM launched its memory disk business in 1984. Initially,
this business enjoyed robust growth and won strong
customer support thanks to superior technology, quality
products and our ability to provide ample supplies.
In the past year, the storage density of memory disks
has increased, leading to greater storage capacity, andprocessing times have decreased. As storage capacity
rises, PCs require fewer memory disks. Somewhat
ironically, therefore, we are partly responsible for lower
production volumes. Declining PC retail prices havefurther reduced the profitability of the memory disk
business. To eliminate the structural deficits that this field
now represents, NLM has decided to withdraw entirely
from memory disks. Although this decision resulted in
an extraordinary loss of ¥7 billion in fiscal 1999,
withdrawing from this business should improve theCompany’s profitability by ¥5 billion in fiscal 2000.
5. Changes in the Structure of the NLM Group’s
Van/Truck Body BusinessNippon Fruehauf Co., Ltd., an NLM subsidiary, is one of
the largest organizations in Japan that specializes in the
manufacturing and sales of aluminum van and truck

Aluminum truck body and exterior

NLM’s Landscape Engineering Division manufactured the railings
for Rainbow Bridge in Tokyo.
Nippon Light Metal Company, Ltd.

5

Meeting Next-Generation Needs for Aluminumbodies and trailers. Truck makers are reducing
production, and business conditions remain severe
despite staff cuts and structural reorganization. Throughreorganization aimed at better efficiency given the current
demand level, we will shed excess capacity by combining
the production functions of Nippon Fruehauf and its
Group companies.
In fiscal 1999, we merged into Nippon Fruehauf three
affiliated companies. In fiscal 2000, we expect Nippon
Fruehauf to generate profits and post capital gains fromthe sale of real estate.
6. Changes in the Group’s Panel Business
NLM is creating a separate company out of its main plants
and facilities involved in the production of interior andexterior insulated panel systems. Following its creation,
NLM will merge into this company other Group
operations centering on interior and exterior panels.
We believe this new company will enable the NLM Groupto boost sector earnings by expanding operations, while
increasing the efficiency of sales, design andconstruction.
Stabilizing Earnings and Promoting Growth
We have adopted several means to draw on NLM’s
strengths and aggressively engage in investment activities.
Through the revisions to our management structure
described below, we plan to stabilize the earnings ofindividually competitive business areas.

1. Boosting Value-Added Materials Operations
One aspect of NLM’s strategy to develop new businesses
includes substantial investment of management resourcesin the development of high-value-added aluminummaterials and finished products. Thanks to aluminum’s
light weight and recyclability, we expect demand to
expand in the transportation sector for aluminum plates,
extruded materials, shaped machine parts and toolingequipment. In addition to being recognized as strong
and lightweight, the transportation sector is beginning
to recognize aluminum for such characteristics as
excellent processability and shock absorbency. We
expect demand to grow even further as NLM applies its
technological expertise to all aspects of aluminum—
including alloy composition and processing—tomeet this demand fully.
2. Bolstering the Aluminum Foil and Powder
Businesses
Our operations in the aluminum foil and powder
businesses are profitable and enjoy the leading sharein the Japanese market. Although as a whole NLM is
reducing capital expenditures, fiscal 2000 will see
important new investments in this area domestically andinternationally, as we strive to grow while preserving ourcompetitive advantage.
3. User-Oriented Development
Our company’s core competencies encompass a fullrange of technological and product developments in

Aluminum paste
Aluminum powder

Insulated panel products

6

Nippon Light Metal Company, Ltd.

NLM aluminum materials are employed in the lightweight frames of the new hybrid cars that Honda MotorCo., Ltd., launched in 1999. Photo provided by Honda
Motor Co., Ltd.

the aluminum industry. Particularly successful aredevelopments that we have undertaken jointly with ourcustomers. NLM’s customer relations are especially closein the automotive, railcar, electric vehicle, electronics,
and building and construction fields. In these areas, we
maintain our lead over competitors by offering customers
functional materials that precisely meet their needs. By
maintaining this development focus, the NLM Group willcontinue to capitalize on opportunities for growth.

A Stronger Management System
To achieve the strategic decisiveness necessary forsuccessful restructuring, resulting in stable profits andbusiness growth, we separated the Company’s
management and executive functions in June 1999. We
restructured the Board of Directors, trimming
membership from 31 to 10 to speed decision making. At
the same time, we created an executive committee to
implement the Board’s decisions, with the aim ofclarifying lines of authority and responsibility.

The New NLM
Our restructuring plans will be fully in place by theend of fiscal 2002. We expect increased stability inearnings and involvement in new areas of business toyield tangible results.
1. Consolidated Ordinary Income of ¥15 Billion
Restructuring, downsizing, integrating and terminating
unprofitable business units will rid us of profit drains.
Evincing our improved profitability, we anticipate
consolidated ordinary income of ¥15 billion.
2. Return on Capital Employed (ROCE) of 5%
ROCE is an index of management efficiency. We willmeasure the efficiency of each business division by
examining the capital it uses, compared with ordinary
income prior to interest receipts. ROCE will thus
become a benchmark for business decisions.

3. Slashing Interest-Bearing Liabilities by¥30 Billion
At the end of the first half of fiscal 1999, interestbearing liabilities totaled ¥330 billion, causing
interest payments to rise to ¥7 billion–¥8 billion. A
stronger financial standing will alleviate the pressureof this expense on profits. To allow this ¥30 billion
reduction, we will increase shareholders’ equity,
create a more efficient management structure andfree up capital through the sale of excess assets.
4. A Leaner Workforce
We plan to adjust our workforce downward by 2,500
people, from a staff of 14,000 at the end of the firsthalf of fiscal 1999 to 11,500. We will achieve thisreduction primarily through attrition and hiring
limitations.

Consolidated Ordinary Income(Billions of yen)
15

Consolidated ROCE

Consolidated Interest-Bearing Debt(%)
6

Consolidated Number of Employees(Billions of yen)340

14,0004

330

13,0002

320

12,0000

310

11,000

10

5

0

-5

-10

’99.9

’00.3

’01.3

’02.3

(Projected)

’03.3

-2

’99.9

’00.3

’01.3

’02.3

(Projected)

’03.3

300

’99.9

’00.3

’01.3

’02.3

(Projected)’03.3

10,000 ’99.9

’00.3

’01.3

’02.3

(Projected)’03.3

Nippon Light Metal Company, Ltd.

7

Review of Operetions

Aluminum Ingot and Chemicals
In the chemicals category, the demand recovery
centered on copper, pulp and paper, and electronics
materials, pushing shipments above the preceding
year’s levels. However, deflationary pricing caused
sales in this category to drop 2.3% to ¥27.6 billion.
Production of mainstay products in this category—alumina and aluminum hydroxide—rose 2.3% to349,136 tons.
In the aluminum ingot sector, high shipmentlevels continued, owing to increased shipments toSoutheast Asia. Demand also recovered from theautomobile industry—this sector’s main demandsource. However, the sector as a whole was affectedby ongoing yen appreciation and a depressed
domestic market, which caused sales of ingots todrop 1.6% to ¥59.1 billion. Production volumes, on
the other hand, remained roughly on par with thepreceding term, at 95,779 tons.
Consolidated sales in this division were down 1.9% to¥86.6 billion. Owing to lower fixed costs, operating profit
surged 38.4% to ¥7.5 billion.

Aluminum Sheet and Extrusions
Owing to yen appreciation, the aluminum sheet category
experienced reduced exports and lower purchasevolumes. Furthermore, selling prices fell as a result of
lower ingot prices. Offsetting these factors, shipments ofaluminum foil and printing plates increased, pushing up
sales 3.2% to ¥29.1 billion and expanding production
8.0% to 98,266 tons.
In aluminum extrusions, shipments of rail and pipe
stock were firm, but demand from the mainstay
construction and trucking industries was lackluster. At thesame time, reduced prices on ingots pushed down sales
prices, prompting a 9.7% decrease in sales to ¥26.9
billion. Production likewise declined 5.8% to 60,927 tons.
Divisional sales dropped 3.4% to ¥56.0 billion.
However, higher production of aluminum sheet helped
absorb fixed costs, causing divisional operating income toimprove ¥727 million to ¥645 million.
Fabricated Products and Others
NLM’s products in this segment include electronics
materials, such as the aluminum substrates that are usedin computer disk drives and the anodized aluminum foil

Alumina is used in various ceramic products.

Aluminum extrusions are used for the exteriorsof 700-Series Nozomi Shinkansen cars.

8

Nippon Light Metal Company, Ltd.

for electrolytic capacitors. Thanks to the booming IT
sector, demand increased for such materials as highvalue-added anodized aluminum foil for electrolytic
capacitors. However, this failed to offset slack demand forthe aluminum substrates used in memory disks.
Consequently, consolidated sales of electronics materials
plunged 30.1% to ¥23.1 billion.
Increased demand for anodized aluminum foil forelectrolytic capacitors provided encouragement foraluminum foil, powder and paste. This expansion, alongwith strong shipments of paste used in automobileinteriors, pushed up sales in this category to ¥72.1
billion, a 3.3% rise.
The export market—the mainstay of the truck bodysector—remained sluggish, dragging down sales of theseproducts 11.2% to ¥37.6 billion.
In environmental products, fierce competition infreezer and refrigerator panels forced down prices
and order volumes. Consequently, sales of theseproducts fell 2.0% to ¥89.1 billion. Overall, thedivision posted consolidated sales of ¥221.8 billion,
down 6.0%. The divisional operating loss amounted to¥216 million, down ¥1.5 billion.

Building Materials
Private-sector construction activity remained
lackluster, with construction of office buildings
essentially suspended, affecting demand for materials
used in the construction of buildings and shops.
(In this regard, Shin Nikkei posted consolidated net
sales of ¥68.0 billion.) Government-sponsored efforts
to push down interest rates and encourage residential
housing loans encouraged year-on-year rises inhousing starts—for freestanding houses andcondominiums. Nevertheless, construction remained
depressed overall.
To meet the emerging demand for environmentallyconscious, energy-saving products, the Company
concentrated on developing soundproofing and insulating
materials, aiming to bolster competitiveness by revising
its product lineup. These activities failed to offset lower
unit sales prices, however, and divisional sales slipped
1.1% to ¥184.7 billion. Profitability improved
nonetheless; the division’s operating loss decreased ¥5.1
billion to ¥1.8 billion. On a consolidated basis (including
Shin Nikkei), the value of production amounted to ¥69.1
billion.

Aluminum structural materials

NLM produces anodized aluminum foil for electrolytic
capacitors.

Nippon Light Metal Company, Ltd.

9

Financial Review

Overview

from the previous fiscal period. Cost of sales decreased 3.9%,

In fiscal 1999, the Japanese economic environment benefited

to ¥448.3 billion ($4,222.8 million), falling faster than net

from the ripple effects of government economic stimulus

sales. As a result, the cost of sales ratio improved 0.3 percent-measures. However, private-sector capital investment re-age point, to 81.6%. By curtailing labor and other costs,

mained tight, and personal consumption was sluggish. Conse-

selling, general and administrative expenses declined 7.5%, toquently, the overall business environment remained austere.

¥98.8 billion ($930.7 million).

Spurring demand for aluminum, residential housing starts

As a result, NLM achieved operating profit of ¥2.2 bil-increased for the first time in three years, and the automobile

lion—moving into the black for the first time in three years.

and machinery industries rallied. Offsetting these factors,

However, the Company posted higher non-operating expenses,

competition in terms of price and quality rose a notch. This

owing to increased financing costs and negative equity insituation was most evident in relation to electronics compo-

earnings of affiliated companies of ¥1.6 billion ($14.7

nent, most notably with computer hard disk drives. Somemillion).

manufacturers of computer hard drives were forced toDuring the term, special gains amounted to ¥2.8 billion

downsize or abandon operations, owing to the intense pricing($25.9 million), comprising a gain on the sale of fixed assets

pressure that accompanied advances in memory capacities.

of ¥2.2 billion ($20.5 million) and a gain on the sale ofinvestment securities of ¥0.6 billion ($5.4 million). As special

Earnings and Expenses

losses, the Company posted a loss on disposal of fixed assets ofUnder these economic conditions, we achieved consolidated¥10.2 billion ($96.1 million), owing to our withdrawal fromnet sales of ¥549.2 billion ($5,173.8 million), down 3.5%

the production of aluminum substrates for memory disks, andNet Sales By Segment (Billions of yen)

Total Shareholders' Equity (Billions of yen)

Equity Ratio (%)

800

160

28

600

120

21

400

80

14

200

40

7

0

0
1996 1997 1998
Years ended March 31

1999

2000

■ Aluminium Ingot and Chemicals■ Aluminium Sheet and Extrusions■ Fabricated Products and Others■ Building Materials

10

Nippon Light Metal Company, Ltd.

01996 1997 1998
As of March 31

1999

2000

1996 1997 1998
As of March 31

1999

2000

the loss on the devaluation of investment securities nearly

Cash Flows

tripled, to ¥0.6 billion ($5.9 million). These special losses

NLM aims to retain sufficient funds to support operations while

evinced the Company’s efforts to reduce costs over the long

maintaining adequate liquidity and a healthy balance sheet. To thisterm by withdrawing from unprofitable areas of business.

end, the Company set the objective of reducing interest-bearing

Consequently, the Company posted a net loss of ¥14.1
billion ($132.8 million), representing a ¥5.2 billion improve-debt ¥30 billion on a Groupwide basis during fiscal 1999.
Cash and cash equivalents at the end of the year totaled

ment from the preceding term, and net loss per share of¥41.9 billion ($$394.8 million), down ¥12.8 billion from thecommon stock of ¥31.01 ($0.29). Despite this situation, theend of the preceding term. This figure includes ¥0.2 billion

Company maintained cash dividends of ¥2.00 ($0.02) per($2.1 million) from the cash and cash equivalents of newly

share, under expectations of future improvements in operating

consolidated subsidiaries.

performance.

Net cash used by operating activities totaled ¥22.2 billion($209.4 million), compared with ¥25.7 billion used by these

Assets, Liabilities and Shareholders’ Equity

activities in fiscal 1998, pointing to ongoing financial improve-

Total assets declined 5.6%, to ¥605.3 billion ($5,702.7

ments. Notably, loss before income taxes and minority interest

million). This decline points to the Company’s successful

required ¥18.6 billion ($174.9 million), improving from

efforts to reduce funding requirements by paying back inter-¥23.7 billion in fiscal 1998. Depreciation and amortization

est-bearing debt, decreasing inventories and curtailing capitalrequired ¥23.0 billion ($217.1 million), compared with ¥25.8

investment. The decrease in property, plant and equipment

billion in the preceding term, owing to ongoing restructuring

was responsible for drawing down fixed assets.

activities. Also for this reason, the loss on disposal of fixed

In line with the aim to decrease interest-bearing debt, total
liabilities decreased 5.3%, to ¥485.8 billion ($4,576.8 million).

assets used ¥10.8 billion ($101.4 million) in fiscal 1999, up
from ¥0.9 billion.

The minority interest in consolidated subsidiaries fell 44.6%,

Net cash used for investing activities amounted to ¥7.6 billion

owing to the merger with Total. Shareholders’ equity expanded($71.9 million), down substantially from the ¥24.1 billion used

7.5%, to ¥100.5 billion ($946.9 million), owing primarily tofor these activities in fiscal 1999. This change was chiefly a result

the elimination of common stock owned by a consolidatedof a decrease in cash used for the payment of fixed assets. In fiscal

subsidiary. This line item pertains to the stock in NLM held by

1999, this item required only ¥12.8 billion ($120.6 million),

Toyal, a consolidated subsidiary in which NLM held a stake ofdown from ¥27.1 billion in fiscal 1998.

approximately 50% prior to the merger.
The shareholders’ equity ratio expanded 2.0 percentage

During the year, net cash used for financing activities was¥27.6 billion ($259.6 million), up substantially from thepoints, to 16.6%. Shares outstanding at the end of the term

¥12.0 billion used for these activities in fiscal 1999. Owing to(excluding treasury stock and shares held by subsidiaries in

the reduction of ¥29.2 billion ($274.7 million) in interest-

the parent) numbered 506,457,651, up from 402,630,508 at

bearing debt, the decrease in short-term borrowings required

the end of fiscal 1998. As a result, shareholders’ equity per¥26.9 billion ($253.9 million), down from ¥3.2 billion, inshare of common stock amounted to ¥198.45 ($1.87), down

keeping with the Company’s aim of improving ROCE. Also,¥33.73 from the preceding year-end.

Toyal’s payment for the purchase of common stock, an ¥18.1
billion item in fiscal 1998, was absent in fiscal 1999.

Nippon Light Metal Company, Ltd.

11

Consolidated Balance Sheets
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
As of March 31, 1999 and 2000

Thousands of
U.S. dollars(Note 2)Millions of yen
1999
ASSETS
Current assets:
Cash and deposits (Notes 3 and 6) ................................................................. ¥ 53,947
Marketable securities (Notes 3, 4 and 6) ......................................................
6,919
Notes and accounts receivable - trade (Notes 6 and 12) ............................... 188,420
Inventories (Note 5)....................................................................................... 73,288
Deferred icnome taxes (Note 7) .....................................................................
—
Other current assets ....................................................................................... 15,425
Allowance for doubtful accounts ...................................................................
(2,292)

2000

2000

¥ 41,215
7,547
188,992
69,952
5,171
10,254(2,539)$ 388,271
71,098
1,780,424
658,992
48,71496,599(23,919)335,707

320,592

3,020,179

Fixed assets:
Property, plant and equipment (Notes 6 and 10):
Buildings and structures ........................................................................... 139,377
Machinery and equipment ....................................................................... 326,806
Land ......................................................................................................... 64,068
Construction in progress ..........................................................................
3,033
Accumulated depreciation ....................................................................... (301,325)

137,605
301,80262,6182,924(296,188)

1,296,326
2,843,165
589,901
27,546(2,790,278)

231,959

208,761

1,966,660

Intangible fixed assets ...................................................................................

3,322

4,255

40,085Investments and other assets:
Investment securities (Notes 4 and 6) ......................................................
Long-term loans receivable.......................................................................
Deferred income taxes (Note 7) ...............................................................
Other assets .............................................................................................
Allowance for doubtful accounts ...............................................................

52,4603,854—
17,830(7,126)44,7003,177
8,232
15,839(7,127)421,10229,92977,551
149,213(67,141)

67,01864,821

610,654302,299

277,837

2,617,399

2,983

6,917

65,163¥640,989¥605,346$5,702,741

Total current assets .............................................................................

Foreign Currency translation adjustment .............................................................

The accompanying notes are an integral part of these statements.

12

Nippon Light Metal Company, Ltd.

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

LIABILITIES AND SHAREHOLDERS’ EQUITY

1999

2000

2000

Current liabilities:
Short-term borrowings and current portion of long-term debt (Note 6) ........ ¥165,827
Notes and accounts payable-trade ................................................................. 109,562
Other current liabilities .................................................................................. 43,174¥131,910
113,01038,000$1,242,675
1,064,625
357,984

Total current liabilities .......................................................................

318,563

282,920

2,665,284

Long-term liabilities:
Long-term debt (Note 6) ................................................................................ 169,618
Accrued severance indemnities ...................................................................... 17,794
Other long-term liabilities (Note 7) ................................................................
7,204

178,981
17,1716,751

1,686,114
161,762
63,599194,616

202,9031,911,475

34,32919,014

179,124

Shareholders’ equity:
Common stock, ¥50 par value;
Authorized: 1,600,000,000 shares
Issued: 1999—536,823,002 shares ...................................................... 48,039
2000—510,825,514 shares ......................................................
—
Additional paid-in capital .............................................................................. 29,382
Revaluation surplus (Note 8) ........................................................................
—
Retained earnings (Note 9) ............................................................................ 34,176
Less —common stock in treasury, at cost ......................................................
(0)—common stock owned by a consolidated subsidiary, at cost ............... (18,116)—
37,45830,837493
32,123(402)——
352,878
290,504
4,644
302,619(3,787)—

93,481

100,509946,858¥640,989¥605,346$5,702,741

Minority interest in consolidated subsidiaries ..........................................

Contingent liabilities (Note 12)

Nippon Light Metal Company, Ltd.

13

Consolidated Statements of Operations
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
For the years ended March 31, 1999 and 2000

Thousands of
U.S. dollars(Note 2)Millions of yen
1999

Net sales .......................................................................................................... ¥569,036
Cost of sales ..................................................................................................... 466,369
Gross profit ................................................................................................. 102,667
Selling, general and administrative expenses ............................................ 106,820
Operating profit (loss) .............................................................................
(4,153)Non-operating income:Interest income .............................................................................................
397
Gain on sale of marketable securities ............................................................
642
Other ..........................................................................................................
3,613
Total non-operating income .....................................................................
4,652
Non-operating expenses:
Interest expense .............................................................................................
8,392
Equity in loss of affiliated companies .............................................................
660
Other ..........................................................................................................
4,893
Total non-operating expenses ................................................................. 13,945
Ordinary loss ............................................................................................. 13,446
Special gains:
Gian on sale of fixed assets ............................................................................
—
Gain on sale of common stock owned by a consolidated subsidiary ..............
—
Total special gains ......................................................................................
—
Special losses:
Loss on disposal of fixed assets ......................................................................
—
Loss on devaluation of investment securities..................................................
235
Pension premiums for prior service cost, net ofreversal of related allowance for severance indemnities ...............................
549
Suspension expenses ......................................................................................
417
Additional retirement allowance to early retirement program ........................
8,365
Loss on devaluation of marketable securities.................................................
659
Total special losses ................................................................................... 10,225
Loss before income taxes and minority interest ................................... 23,671
Income taxes (Note 7)—current ......................................................................
1,834—deferred .....................................................................
—
1,834
Minority interest .............................................................................................
(6,257)Net loss ........................................................................................................ ¥ 19,248
Per share of common stock:
Net loss .........................................................................................................
Cash dividends ..............................................................................................
The accompanying notes are an integral part of these statements.

14

Nippon Light Metal Company, Ltd.

2000

2000

¥549,194448,255
100,939
98,7892,150$5,173,754
4,222,845
950,909930,655
20,254

146
—
3,316
3,462

1,375
—
31,23932,614

7,242
1,559
6,310
15,111
9,499

68,224
14,68759,444
142,355
89,487

2,172
578
2,750

20,462
5,445
25,907

10,202627

96,109
5,907

518
470
—
—
11,817
18,566
1,811(4,448)(2,637)(1,833)¥ 14,096

4,880
4,427
—
—
111,323
174,903
17,061(41,903)(24,842)(17,268)$ 132,793
U.S. dollars(Note 2)

Yen

¥40.98¥ 2.00¥31.01¥ 2.00

$0.29
$0.02

Consolidated Statements of Shareholders’ Equity
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
For the years ended March 31, 1999 and 2000

Millions of yen

Number ofshares issued

Commonstock

Additional
paid-in capitalLegalreserve

Balance at March 31, 1998 ...................................
536,823,002 ¥ 48,039 ¥ 29,382
Transfer from legal reserve toretained earnings (Note 9) ..............................
Net loss ..........................................................
Cash dividends ...................................................
Directors’ and statutory auditors’ bonuses ..........
Inclusion in consolidation of
unconsolidated subsidiaries .............................
Net decrease in common stock in treasury ..........
Purchase of common stock ................................
Balance at March 31, 1999 ...................................
536,823,002 48,039
29,382
Cumulative effect of changes in accounting
for income taxes ..............................................
Net loss ..........................................................
Cash dividends ...................................................
Directors’ and statutory auditors’ bonuses ..........
Merger with a consolidated subsidiary ................ 83,192,994
4,159
1,237
Redemption of common stock in treasury
taken over at merger ....................................... (109,190,482) (14,740)
218
Inclusion in consolidation of unconsolidated
subsidiaries .....................................................
Affiliated company newly accounted forby the equity method .......................................
Equity on revaluation gain for land of anaffiliated company ...........................................
Net decrease in common stock in treasury ..........
Balance at March 31, 2000 ................................... 510,825,514 ¥37,458 ¥30,837¥ 2,860

Revaluation
surplusRetainedearnings

Common stock
owned by aCommon stock consolidated
subsidiaryin treasury¥ — ¥ 51,556 ¥(2,860)

(1)

¥

—

2,860
(19,248)(1,074)
(24)
106
1

—

—

(0)

(18,116)(18,116)

6,068(14,096)(940)(9)
7,534 (15,370)

15,37034,176

14,522
37
(647)
493
¥

—

¥493 ¥ 32,123 ¥

446
(402)

¥

2,746
—

Thousands of U.S. dollars (Note 2)

Number ofshares issued

Commonstock

Additional
paid-in capitalLegalreserve

Balance at March 31, 1999 ...................................
536,823,002 $ 452,558 $ 276,797
Cumulative effect of changes in accounting
for income taxes ..............................................
Net loss ..........................................................
Cash dividends ...................................................
Directors’ and statutory auditors’ bonuses ..........
Merger with a consolidated subsidiary ................ 83,192,994 39,180 11,653
Redemption of common stock in treasury
taken over at merger ....................................... (109,190,482)(138,860) 2,054
Inclusion in consolidation of unconsolidated
subsidiaries .....................................................
Affiliated company newly accounted forby the equity method .......................................
Equity on revaluation gain for land of
an affiliated company.......................................
Net decrease in common stock in treasury ..........
Balance at March 31, 2000 ................................... 510,825,514 $352,878 $290,504$—

Revaluation
surplus$Retainedearnings— $ 321,959 $Common stock
owned by aCommon stock consolidated
subsidiaryin treasury(2) $ (170,664)

57,164(132,793)(8,855)(85)
70,975 (144,795)

144,795

136,806
349(6,095)
4,644
$—

4,204
25,869$4,644 $302,619 $ (3,787) $—The accompanying notes are an integral part of these statements.
Nippon Light Metal Company, Ltd.

15

Consolidated Statements of Cash Flows
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
For the years ended March 31, 1999 and 2000

Thousands of
U.S. dollars(Note 2)Millions of yen
1999

Cash flows from operating activities:
Loss before income taxes and minority interest .............................................. ¥(23,671)
Depreciation and amortization ....................................................................... 25,751
Loss on disposal of fixed assets ......................................................................
982
Gain on sales of fixed assets ...........................................................................
(67)
Gain on sales of common stock owned by a consolidated subsidiary ..............
—
Loss on devaluation of investment securities..................................................
235
Interest and dividend income ........................................................................
(650)
Interest expense .............................................................................................
8,392
Equity in loss of affiliated companies .............................................................
660(Increase) decrease in notes and accounts receivable - trade ........................ 40,526
Decrease in inventories .................................................................................. 11,255
Increase (decrease) in notes and accounts payable - trade ........................... (20,414)
Other.............................................................................................................. (9,195)
Sub total ........................................................................................... 33,804
Interest and dividend income received ...........................................................
1,368
Interest expense paid ....................................................................................
(8,462)
Income taxes paid .........................................................................................
(1,036)
Net cash provided by operating activities ................................... 25,674
Cash flows from investing activities:
Decrease in time deposits..............................................................................
72
Payment for purchase of marketable securities ..............................................
(446)
Proceeds from sales of marketable securities ................................................
2,546
Payment for purchase of fixed assets ............................................................. (27,062)
Proceeds from sales of fixed assets.................................................................
1,215(Increase) decrease in long-term loans receivable ........................................
121
Other ..........................................................................................................
774
Net cash used for investing activities .......................................... (22,780)
Cash flows from financing activities:
Decrease in short-term borrowings ................................................................ (3,193)
Decrease in commercial paper....................................................................... (6,000)
Proceed from long-term debt ........................................................................ 43,634
Repayments of long-term debt ....................................................................... (27,008)
Proceed from sales of common stock in tresury ............................................
1
Payment for purchase of common stock ........................................................... (18,116)
Proceed from sales of common stock owned by a consolidated subsidiary .........
—Cash dividends paid by the Company .............................................................
(1,074)
Cash dividends paid to minority interest .........................................................
(240)
Other ..........................................................................................................
—Net cash used for financing activities .......................................... (11,996)
Effect of exchange rate changes on cash and cash equivalents ........................
42
Net decrease in cash and cash equivalents...................................................... (9,060)
Cash and cash equivalents at beginning of year............................................... 63,622
Cash and cash equivalents of newly consolidated subsidiaries ........................
174
Cash and cash equivalents at end of year (Note 3) .................... ¥ 54,736
The accompanying notes are an integral part of these statements.

16

Nippon Light Metal Company, Ltd.

2000

2000

¥(18,566)
23,047
10,765(2,367)
(578)
627
(488)
7,242
1,559
(1,360)
3,207
3,162
3,356
29,606815(7,178)(1,010)22,233$(174,903)
217,117
101,413(22,299)(5,445)
5,907(4,597)
68,224
14,687(12,812)30,212
29,78831,615278,907
7,678(67,621)(9,515)
209,449

109(1,948)
1,419(12,803)
5,391
(305)
508
(7,629)1,027(18,351)
13,368(120,612)
50,786(2,873)
4,785(71,870)(26,949)(5,000)36,202(33,417)
306
—
3,093
(804)
(701)
(290)
(27,560)(93)(13,049)
54,736225¥ 41,912(253,877)(47,103)
341,045(314,809)
2,883—
29,138(7,574)(6,604)(2,732)(259,633)(876)(122,930)
515,648
2,119$ 394,837

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

1. SIGNIFICANT ACCOUNTING POLICIES(a) Basis of presenting financial statements
The accompanying consolidated financial statements of Nippon Light Metal Company, Ltd. (“the Company”) and its consolidated subsidiaries(together “the Companies”) are prepared in accordance with accounting principles generally accepted in Japan, which are different in certain
respects to the application and disclosure requirements of International Accounting Standards. The notes to the consolidated financial statements include financial information which is not required under accounting principles generally accepted in Japan, but is presented herein as
additional information. In addition, the consolidated statements of shareholders’ equity are not required in Japan, but are presented herein as
additional information. The accompanying consolidated financial statements include certain reclassifications and modifications in order topresent them in a form which is more familiar to readers outside Japan.
In March 1998, the Business Accounting Deliberation Council issued the statement of “Standards for Preparation of Consolidated Statements of Cash Flows” which requires a consolidated statement of cash flows to be prepared for periods beginning on or after April 1, 1999. This
new standard specifies a format and the scope of cash and cash equivalents which differ from those practically used in earlier years, accordingly
the comparative period’s consolidated statement of cash flows has been restated to conform with this new standard.
(b) Consolidation and investments in affiliated companies
The consolidated financial statements include the accounts of the Company and, with minor exceptions, companies substantially controlled by
the Company. From the fiscal year ended March 31, 2000, in addition to majority-owned subsidiaries, 40% to 50% owned company that is
substantially controlled by the Company was consolidated in accordance with the new accounting standard in Japan. All significant intercompany transactions and accounts have been eliminated.
The investments in significant companies where the Company has significant influence over management are stated at cost plus theCompany’s equity in undistributed earnings. From the fiscal year ended March 31, 2000, in addition to 20% to 50% owned affiliates, 15% to 20%
owned company where the Company has significant influence over management was accounted for by the equity method in accordance with the
new accounting standard in Japan.
The difference between the cost and underlying net equity of investments in consolidated subsidiaries or affiliates accounted for by the equity
method had been allocated to identifiable assets based on fair market value at the date of acquisition. The unassigned residual value of excess ofthe cost over the underlying net equity is recognized as goodwill and deferred or amortized on a straight-line basis within the effective period,
with the exception of minor amounts which are charged to income in the year of acquisition.
(c) Translation of foreign currencies
Foreign currency amounts are translated into Japanese yen at appropriate year-end rates for current monetary assets and liabilities and at
historical rates for long-term assets and liabilities and non-monetary current assets and liabilities. Resulting exchange gains or losses are
credited or charged to income as incurred. Long-term receivables and payables in foreign currency hedged by forward exchange contracts aretranslated into Japanese yen at the contracted rates of exchange. Gains or losses resulting from forward exchange contracts are deferred andamortized over the contract periods.
In preparing the consolidated financial statements, all assets and liabilities of foreign subsidiaries and affiliates are translated into Japanese
yen at appropriate current year-end rates and all income and expenses are translated at rates that approximate those rates prevailing at the timeof transaction. The cumulative translation differences are charged or credited to the foreign currency translation adjustment account in theaccompanying consolidated balance sheets.
(d) Cash and cash equivalents
Cash and cash equivalents in the consolidated statements of cash flows are composed of cash on hand, bank deposits available for withdrawal on
demand and short-term investments with an original maturity of three months or less and which represent a minor risk of fluctuations in value.
(e) Inventories
Inventories are principally stated at cost, as determined by the moving-average method, except for costs related to construction-type-contracts
which are specifically identified.
(f) Marketable securities and investment securities
Marketable equity securities are stated principally at the lower of cost or market value, determined by the moving average method.
Marketable securities other than marketable equity securities and investment securities are stated at cost, except for those which have been
written down as a result of the permanent impairment of their underlying value.
Effective April 1, 1999, the Company and some consolidated subsidiaries changed their method of accounting for evaluation of marketable
equity securities from the cost method to the lower of cost or market value method, in order to more appropriately reflect their financial position

Nippon Light Metal Company, Ltd.

17

and to unify accounting policy applied by the Companies. The effect of this change for the year ended March 31, 2000 was to increase ordinary
loss by approximately ¥734 million ($6,915 thousand) and to increase loss before income taxes and minority interest by approximately ¥1,025
million ($9,656 thousand).
(g) Allowance for doubtful accounts
The allowance for doubtful accounts is estimated at the maximum tax deductible limit as specified by Japanese tax laws (an average percentageof actual bad debt in the past is principally applied to the balance of receivables) and an additional amount deemed necessary to cover possible
losses estimated on an individual account basis.
(h) Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost. Depreciation is computed principally by the straight-line method at rates based on theestimated useful lives of respective assets.
(i) Accrued severance indemnities and pension plan
Employees whose services with the Company and consolidated subsidiaries in Japan are terminated are usually entitled to receive lump-sum
severance indemnities and/or pension payments based on the defined benefit formula considering current rates of pay and length of service.
The benefits for the severance indemnities are reserved for or funded through accruals for employees’ severance indemnities or tax-qualified
pension plans. In accordance with prevailing accounting practices in Japan, provisions were made mainly at 40% of the liability which would be
required if all qualified employees were to leave the companies voluntarily at the balance sheet date, excluding a portion covered by tax-qualified pension
plans. Premiums for tax-qualified pension plans are charged to income at payment.
As a result of establishment of a tax-qualified pension plan which fully covers severance indemnities, excess accrued severance indemnities
at the transition date as defined under accounting principles generally accepted in Japan are being reversed over the period of amortization ofprior service cost. Pension premiums related to amortization of prior service cost, net of reversal of excess accrued severance indemnities, arepresented separately in the accompanying consolidated statements of operations.
(j) Lease transactions
Under Japanese accounting practices, financing leases are capitalized in principle. However, financing leases without options to transfer
ownership of leased assets to lessees may be accounted for as operating leases subject to appropriate footnote disclosure. Therefore, the Companies charge or credit periodic lease payments and receipts to income as incurred.
(k) Income Taxes
Income taxes of the Company and its domestic subsidiaries consist of corporate income taxes, local inhabitants taxes and enterprise taxes.
In the year ended March 31, 2000, the Company and its subsidiaries adopted the deferred tax accounting method in accordance with the
new Accounting Standard for Preparation of Consolidated Financial Statements and the new Accounting Standard for Income Taxes which was
issued by the Business Accounting Deliberation Council. Under the new standard, income taxes were determined using the asset and liability
approach, whereby deferred tax assets and liabilities were recognized in respect of temporary differences between the tax basis of assets andliabilities and those as reported in the financial statements. The cumulative effect of adopting deferred tax accounting at April 1, 1999 was
charged to retained earnings.
In the year ended March 31, 1999, income taxes of the Company and its subsidiaries were provided for at an amount currently payable basedon the tax returns filed with tax authorities. Also some of consolidated subsidiaries accounted for income taxes on the basis of interperiod
allocation whereby tax effects on timing differences between tax and financial reporting were recognized.
The effects of above change were to increase deferred tax assets by ¥12,567 million ($118,389 thousand) (current:¥4,609 million($43,420
thousand), non-current:¥7,958 million($74,969 thousand)) and to increase deferred tax liabilities by ¥9 million($85 thousand) (non-current:¥9 million($85 thousand)) on the balance sheet as of March 31, 2000, to decrease net loss for the year ended March 31, 2000 by ¥4,683
million($44,117 thousand) and to increase retained earnings by ¥10,751 million($101,281 thousand), respectively.
(l) Research and development expenses and computer software
Research and development expenses are charged to income as incurred.
Expenditure relating to computer software developed for internal use is charged to income as incurred, except if it contributes to thegeneration of income or to future cost savings, which is capitalized and amortized using the straight-line method over its estimated useful life
within 5 years.
Until March 31, 1999, expenditure relating to computer software developed for internal use developed by consolidated subsidiaries was
charged to income as incurred. From the year beginning on April 1, 1999, such expenditure which contributes to generation of income or to18

Nippon Light Metal Company, Ltd.

future cost savings is capitalized as intangible fixed assets in accordance with the new Accounting Standard for Research and Development Cost,
etc. which was issued by the Business Accounting Deliberation Council. The effect of this change for the year ended March 31, 2000 was todecrease ordinary loss and loss before income taxes and minority interest by ¥475 million ($4,475 thousand), respectively.
(m) Appropriation of retained earnings
The Japanese Commercial Code provides that appropriations of retained earnings require approval of the shareholders at an ordinary general meeting.
The appropriations of retained earnings are, therefore, not reflected in the consolidated financial statements for the period to which they relate but arerecorded in the consolidated financial statements in the subsequent accounting period after shareholders’ approval has been obtained.
(n) Net loss and dividends per share
Net loss per share of common stock shown in the accompanying consolidated statements of operations is computed based on the weighted
average number of shares outstanding during each year.
Cash dividends per share shown in the accompanying consolidated statements of operations represent dividends declared and paid asapplicable to the respective fiscal year.
(o) Reclassifications
Certain reclassifications of previously reported amounts have been made to conform with current classifications.

2. U.S. DOLLAR AMOUNTSThe U.S. dollar amounts are included solely for convenience. These translations should not be construed as representations that the yen amounts
actually represent, or have been or could be converted into, U.S. dollars. The amounts shown in U.S. dollars are not intended to be computed inaccordance with generally accepted translation procedures. The rate of ¥106.15 = U.S.$1, the approximate current rate prevailing on March 31,
2000, has been used for the purpose of presentation of the U.S. dollar amounts in the accompanying consolidated financial statements.
3. CASH AND CASH EQUIVALENTS
Reconciliation of cash and cash equivalents to the accounts disclosed on balance sheets at March 31, 1999 and 2000 is as follows:
Thousands of
U.S. dollars

Millions of yen

Cash and deposit ................................................................................................................................
Time deposits with maturity in excess of 3 months ..........................................................................
Commercial paper issued by other company included in marketable securities ............................
Cash and cash equivalents .................................................................................................................

March 31, 1999

March 31, 2000

March 31, 2000

¥53,947(1,211)
2,000¥54,736¥41,215(1,103)1,800¥41,912$388,271(10,391)
16,957$394,837

4. MARKETABLE SECURITIES AND INVESTMENT SECURITIESThe carrying amounts and market value of marketable securities included in marketable securities and investment securities at March 31, 2000
are as follows:
Marketable securities
Carrying amounts ....................................................................................................................................................
Market value ............................................................................................................................................................
Unrealized gain .......................................................................................................................................................
Investment securities
Carrying amounts ....................................................................................................................................................
Market value ............................................................................................................................................................
Unrealized gain .......................................................................................................................................................

Millions of yen

Thousands of
U.S. dollars¥5,435
6,765¥1,330$51,201
63,731$12,530¥4,2196,023¥1,804$39,746
56,740$16,994

Nippon Light Metal Company, Ltd.

19

The above table includes the amounts relating to three affiliated companies accounted for by the equity method, the shares of which have quoted
market values. The cost of marketable securities other than marketable equity securities approximates market value.
The disclosure of the carrying amount and market value of marketable securities is required under the new Accounting Standard for
Preparation of Consolidated Financial Statements from the fiscal year beginning from April 1,1999. Accordingly, those information as of March
31, 1999 are not required.
5. INVENTORIESInventories at March 31, 1999 and 2000 comprised the following;Thousands of
U.S. dollars

Millions of yen

Finished products ...............................................................................................................................
Work in process, including costs related to construction-type-contracts .........................................
Raw materials and supplies ...............................................................................................................

1999

2000

2000

¥32,053
28,511
12,724¥73,288¥28,537
28,64812,767¥69,952$268,837
269,882
120,273$658,992

6. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings at March 31, 2000 bore interest at annual rates ranging from 0.625% to 7.520% and were represented generally by bankoverdrafts or short-term notes maturing at various dates within one year.
Long-term debt at March 31, 2000 comprised the following;
Loans, principally from banks and insurance companies due from 2000 to 2013
with interest rates ranging from 0.930% to 8.020%:
Secured ...................................................................................................................................................................
Unsecured .................................................................................................................................................................
Unsecured 2.90% Bonds due November 7, 2002, redeemable before due date (A) .......................................................
Unsecured 2.45% Bonds due December 5, 2001, redeemable before due date ..............................................................
Unsecured 2.75% Bonds due December 5, 2002, redeemable before due date (B) .......................................................
Unsecured 2.45% Bonds due January 10, 2002, redeemable before due date ...............................................................
Unsecured 2.65% Bonds due February 10, 2004, redeemable before due date .............................................................
Unsecured 2.40% Bonds due February 10, 2003, redeemable before due date .............................................................
Unsecured 2.45% Bonds due July 25, 2003, redeemable before due date ......................................................................
Unsecured 2.675% Bonds due August 20, 2004, redeemable before due date ...............................................................
Unsecured 2.175% Bonds due September 11, 2002, redeemable before due date .........................................................
Unsecured 2.00% Bonds due December 25, 2000, redeemable before due date ............................................................
Unsecured 2.00% Bonds due June 22, 2001, redeemable before due date .....................................................................
Unsecured 2.40% Bonds due July 19, 2002, redeemable before due date ......................................................................
Less-portion due within one year ...................................................................................................................................
Total long-term debt .......................................................................................................................................................

Millions of yen

Thousands of
U.S. dollars¥ 52,909
43,711
10,00010,00010,00010,00010,00010,00010,00010,00010,000
5,000
5,000
7,000
203,620(24,639)¥178,981$ 498,437
411,785
94,206
94,206
94,206
94,206
94,206
94,206
94,206
94,206
94,206
47,104
47,10465,945
1,918,229(232,115)$1,686,114(A) The 2.90% Bonds were issued at the price of 100.00% of the principal amount, with interest thereon swapped at the rate of six-month yen
LIBOR until September 1998, and after that, such interest rates were swapped at the fixed rate.
(B) The 2.75% Bonds of ¥10,000 million ($94,206 thousand) were issued at the price of 99.90% of the principal amount and interest on ¥1,000
million ($9,421 thousand) out of ¥10,000 million ($94,206 thousand) was swapped at the rate of six-month yen LIBOR until September
1998, and after that, such interest rates were swapped at the fixed rate.
The differences between the issued price and the principal amount are credited or charged to income at issuance.

20

Nippon Light Metal Company, Ltd.

A summary of assets pledged as collateral for short-term borrowings and long-term debt at March 31, 2000 is as follows:
Cash and deposits ............................................................................................................................................................
Marketable securities ......................................................................................................................................................
Notes and accounts receivable-trade ..............................................................................................................................
Property, plant and equipment .......................................................................................................................................
Investment securities ......................................................................................................................................................

Millions of yen

Thousands of
U.S. dollars¥$

Millions of yen

Thousands of
U.S. dollars¥ 24,639
45,537
69,21633,29430,934¥203,620$ 232,115
428,987
652,059
313,650
291,418$1,918,229

50
137
752
126,172
57

471
1,291
7,084
1,188,620
537

The aggregate annual maturities of long-term debt after March 31, 2000 are as follows:
Years ending March 31
2001 .................................................................................................................................................................................
2002 .................................................................................................................................................................................
2003 .................................................................................................................................................................................
2004 .................................................................................................................................................................................
2005 and thereafter .........................................................................................................................................................

7. INCOME TAXESThe Company and its domestic subsidiaries are subject to a number of different taxes based on income which, in the aggregate, indicate astatutory effective tax rate of approximately 47% for the year ended March 31, 1999, and 42% for the year ended March 31, 2000.
Tax losses can be carried forward for a five-year period to offset future taxable income.
Significant components of deferred tax assets and liabilities at March 31, 2000, are as follows:
Millions of yen

Deferred tax assets:
Tax loss carry forwards ............................................................................................................................................
Loss on disposal of fixed assets ................................................................................................................................
Accrued severance indemnities ................................................................................................................................
Allowance for doubtful accounts .............................................................................................................................
Others .......................................................................................................................................................................
Total gross deferred tax assets ..........................................................................................................................
Valuation allowance ................................................................................................................................................
Total deferred tax assets, net of valuation allowance ......................................................................................
Deferred tax liabilities:
Depreciation .............................................................................................................................................................
Others .......................................................................................................................................................................
Total gross deferred tax liabilities ....................................................................................................................
Net deferred tax assets .....................................................................................................................................................

Thousands of
U.S. dollars¥22,859
3,200
3,038
1,971
5,297
36,365(21,046)
15,319$215,346
30,146
28,62018,56849,901
342,581(198,267)
144,314(1,519)(406)(1,925)¥13,394(14,310)(3,824)(18,134)$126,180

The above disclosure has been required under the new accounting standard from the fiscal year beginning after April 1,1999. Accordingly,
the component of deferred tax assets and liabilities as of March 31, 1999 are not available.
Due to net loss for the year ended March 31, 2000, the break down of the difference between the statutory tax rate and the effective income
tax rate was not presented.
8. REVALUATION SURPLUS
On March 31, 2000, as permitted by the Land Revaluation Law, an equity affiliate of the Company revalued its land used in business. Resulting
from this revaluation, the Company recognized as its share of the Revaluation surplus the equity portion of the affiliate’s revaluation surplus netof related taxes.

Nippon Light Metal Company, Ltd.

21

9. APPROPRIATIONS OF RETAINED EARNINGS
The following appropriations were approved at the ordinary general meeting of shareholders of the Company held on June 29, 2000.
Millions of yen

Thousands of
U.S. dollars¥1,012102¥1,114$ 9,534
961$10,495

Appropriations for:Cash dividends .........................................................................................................................................................
Legal reserve .............................................................................................................................................................

The Japanese Commercial Code requires that an amount equal to at least 10% of cash dividends and bonuses to directors and statutory
auditors paid in cash be appropriated from retained earnings as a legal reserve. No further appropriation is required when the legal reserve
equals 25% of stated capital. The legal reserve is not available for dividends but may be used to reduce a deficit with shareholder approval or
capitalized by resolution of the Board of Directors. From the fiscal year ended March 31, 1999, the legal reserve is included in retained earnings
as a result of the new Accounting Standard for Preparation of Consolidated Financial Statements.
10. LEASE TRANSACTIONSThe Companies charge or credit periodic lease payments and receipts for financing leases without options to transfer ownership of leased assets
to lessees. Such periodic lease payments and receipts under financing lease contracts totaled ¥1,906 million and ¥2,148 million ($20,236
thousand), ¥209 million and ¥183 million ($1,724 thousand), respectively, for the years ended March 31, 1999 and 2000. The future lease
payments and receipts under the Companies’ financing leases and noncancelable operating leases, including amounts representing interest, at
March 31, 1999 and 2000 are as follows:
Thousands of
U.S. dollars

Millions of yen

Lease payments
Due within one year ....................................................................................................................
Due beyond one year ..................................................................................................................
Lease receipts
Due within one year ....................................................................................................................
Due beyond one year ..................................................................................................................

1999

2000

2000

¥2,316
3,646¥5,962¥2,4703,555¥6,025$23,269
33,490$56,759¥ 558
716¥1,274¥ 449
574¥1,023$ 4,230
5,407$ 9,637

Leased assets under the Companies’ financing leases, where lessors retain ownership of leased assets, are accounted for as operating leases by
the Companies. If such leases were capitalized, then the cost of the assets and the related accumulated depreciation at March 31, 1999 and 2000
would be as follows:
Millions of yen
1999
Cost

Buildings and structures .......................................................................................
Machinery and equipment ...................................................................................
Other assets included under investments and other assets ..................................

22

Nippon Light Metal Company, Ltd.

¥ 419
7,576
140
¥8,135

Accumulated
depreciation

¥ 333
3,731
94
¥4,158

Net
Amount

¥ 86
3,845
46
¥3,977

Thousands of
U.S. dollars

Millions of yen
2000

Buildings and structures .......................................................................................
Machinery and equipment ...................................................................................
Intangible fixed assets ...........................................................................................

2000

Cost

Accumulated
depreciation

¥ 229
8,733
152
¥9,114

¥ 192
4,243
73
¥4,508

Net
AmountNet
Amount

¥

37
4,490
79
¥4,606$348
42,299744$43,391

The depreciation amount of leased assets computed on the straight-line method over the periods of the leases would have been ¥1,906
million and ¥2,148 million ($20,236 thousand) for the years ended March 31, 1999 and 2000, respectively.
Fixed assets excluding sub-leased, which are leased to other companies under financing leases without options to transfer ownership ofleased assets to lessees at March 31, 1999 and 2000, are as follows:
Millions of yen
1999

Machinery and equipment ...................................................................................

Cost

Accumulated
depreciation

Net
Amount

¥671

¥514

¥157
Thousands of
U.S. dollars

Millions of yen
2000

Machinery and equipment ...................................................................................

2000

Cost

Accumulated
depreciation

Net
AmountNet
Amount

¥466

¥318

¥148

$1,394The depreciation amount of leased assets computed on the straight-line method over the periods of the leases would have been ¥156 millionand ¥136 million ($1,281 thousand) for the years ended March 31, 1999 and 2000, respectively.
11. DERIVATIVESIn the normal course of business, the Companies enter into various derivative financial instruments in order to manage exposures resulting fromfluctuations in foreign currency exchange rates, interest rates and prices of aluminum ingot in market. The Companies don’t hold or issue
derivative financial instruments for trading purposes. The primary classes of derivatives used by the Companies are foreign exchange forward
contract, interest rate swap agreement and aluminum ingot forward contract. The foreign exchange forward contracts have been entered into as
hedges against the adverse impact of foreign currencies arising from business operations. The interest rate swap agreements have been entered into
as hedges against the adverse fluctuation in the interest rate on the underlying debts. The aluminum ingot forward contracts have been enteredinto as hedges against the adverse fluctuation in the price of aluminum ingot which is arising from selling and purchasing.
The information of the off-balance sheet forward exchange contracts is not prepared because it is not significant. The off-balance sheet
interest rate swap agreements and aluminum ingot forward contracts at March 31, 2000 are as follows:
Thousands of
U.S. dollars

Millions of yen
2000
Contract
amountInterest rate swap agreements:
Variable-rate into fixed-rate obligations ............................
Fixed-rate into variable-rate obligations ...........................
Aluminum ingot forward contracts:
To sell aluminum ingot ......................................................
To buy aluminum ingot .....................................................

Estimated
fair value¥13,000 * ¥ 681
14,450 *
(65)
784
5,244

723
5,192

2000
Unrealized
gain/(loss)

¥681
(65)
61
(52)

Contract
amountEstimated
fair value$122,468 $ 6,415
136,128(612)
7,386
49,402

Unrealized
gain/(loss)$6,415(612)

6,811
48,912575(490)* Contract amount of interest rate swap represents the nominal amount of agreements.

Nippon Light Metal Company, Ltd.

23

The fair values of interest rate swap agreements were estimated using quotes from brokers and represent the discounted amounts of net future
cash flows. The fair values of aluminum ingot forward contracts were estimated using quotes from brokers.
The disclosure of fair value of derivative financial instruments has been required under the new Accounting Standard for Preparation ofConsolidated Financial Statements from the fiscal year beginning after April 1, 1999. Accordingly, the disclosure of fair value of derivative financial
instruments as of March 31, 1999 is not required.
12. CONTINGENT LIABILITIESContingent liabilities at March 31, 2000 for loans guaranteed and other guarantees given in the ordinary course of business amounted to¥28,340 million ($266,981 thousand), including ¥6,371 million ($60,019 thousand) shared by other joint guarantors, and ¥4,061 million($38,257 thousand) for notes discounted.
13. SUBSEQUENT EVENTOn April 28, 2000, the Company and Shin Nikkei Company, Ltd (SNC), which is a 66.8 % owned consolidated subsidiary of the Company, agreed
that SNC would become a wholly-owned subsidiary of the Company on August 1, 2000 by utilizing the exchange procedure defined in Commercial Code.
The agreed share exchange ratio is 1 share of SNC for 0.86 share of the Company. As a result, approximately 33 million shares of theCompany would be issued and the total capital would increase by approximately ¥1,626 million ($15,320 thousand).
14. SEGMENT INFORMATIONThe Companies operate within four distinct industry segments mainly in Japan: aluminum ingot and chemicals, aluminum sheet andextrusions, fabricated products and others and building materials.
The aluminum ingot and chemicals segment supplies aluminum primary and remelt ingot used for various industrial materials, andproduces a wide spectrum of aluminas and alumina hydrates ranging from raw material 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, among others, magnetic discs, refrigerated
warehouses, aluminum foil and heat exchange radiators.
The building materials segment produces a wide range of materials including sashes, curtain walls, doors and fences for commercial andresidential construction.
Corporate items include general and administrative expenses and other expenses not identified with business segments.
Export sales and operations outside Japan are insignificant.
Information by industry segment for the years ended March 31, 1999 and 2000 are as follows:
Millions of yen
1999

Sales:
Customers ..................................................................
Intersegment .............................................................
Total ...................................................................
Operating expenses ..........................................................
Operating profit (loss) .....................................................
Identifiable assets .............................................................
Depreciation .....................................................................
Capital expenditures ........................................................

Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts
and others

Building
materials¥ 88,277
50,652
138,929
133,489¥ 5,440¥ 97,750¥ 3,153¥ 2,889¥57,974
30,52388,497
88,579¥ (82)¥94,171¥ 3,819¥ 2,237¥235,950
22,899258,849
257,568¥ 1,281¥230,515¥ 11,025¥ 10,607¥186,835
1,760
188,595
195,529¥ (6,934)¥206,925¥ 7,751¥ 3,846*1 Netting corporate items ...¥4,182 million *2 Netting corporate items ...¥29,398 million

24

Nippon Light Metal Company, Ltd.

Eliminationor
corporate items¥—(105,834)(105,834)(101,976)*1¥ (3,858)¥ 11,628 *2
¥
¥

3
1

Consolidated¥569,036—
569,036
573,189¥ (4,153)¥640,989¥ 25,751¥ 19,580

Millions of yen
2000

Sales:
Customers ...........................................
Intersegment ......................................
Total ............................................
Operating expenses ...................................
Operating profit (loss) ..............................
Identifiable assets ......................................
Depreciation ..............................................
Capital expenditures .................................

Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts
and others

Building
materials¥ 86,642
48,636135,278
127,750¥ 7,528¥ 96,759¥ 3,024¥ 2,666¥55,990
26,66682,65682,011¥ 645¥84,993¥ 3,648¥ 2,110¥221,849
18,011
239,860
240,076¥ (216)¥224,704¥ 9,094¥ 4,773¥184,713
3,400
188,113
189,911¥ (1,798)¥200,068¥ 7,278¥ 3,876

Eliminationor
corporate items

Consolidated¥—(96,713)(96,713)(92,704)*1¥ (4,009)¥ (1,178)*2¥
3¥—¥549,194—
549,194
547,044¥ 2,150¥605,346¥ 23,047¥ 13,425

Eliminationor
corporate items

Consolidated*1 Netting corporate items...¥4,012 million *2 Netting corporate items...¥21,379 million
Thousands of U.S. dollars
2000

Sales:
Customers ..........................................
Intersegment ......................................
Total ............................................
Operating expenses ...................................
Operating profit (loss) ..............................
Identifiable assets .....................................
Depreciation ..............................................
Capital expenditures .................................

Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts
and others

Building
materials$ 816,222
458,182
1,274,404
1,203,485$ 70,919$ 911,531$ 28,488$ 25,115$527,461
251,211778,672
772,596$ 6,076$800,688$ 34,367$ 19,878$2,089,958
169,675
2,259,633
2,261,668$ (2,035)$2,116,853$ 85,671$ 44,965$1,740,113
32,0301,772,143
1,789,081$ (16,938)$1,884,767$ 68,563$ 36,514$— $5,173,754(911,098)—(911,098) 5,173,754(873,330)*1 5,153,500$ (37,768) $ 20,254$ (11,098)*2 $5,702,741$
28 $ 217,117$— $ 126,472*1 Netting corporate items...$37,796 thousand *2 Netting corporate items...$201,404 thousand

As discussed in Note 1 (l), expenditure relating to computer software developed for internal use which contributes to the generation ofincome or to future cost savings is capitalized as intangible fixed assets from the year beginning after April 1, 1999.
The effect of this change for the year ended March 31, 2000 was to increase operating profit by approximately ¥4 million ($38 thousand) in
Aluminum ingot and chemicals segment and approximately ¥40 million ($377 thousand) in Aluminum sheet and extrusions segment, todecrease operating loss by approximately ¥98 million ($923 thousand) in Fabricated products and others segment and approximately ¥333
million ($3,137 thousand) in Building materials segment.

Nippon Light Metal Company, Ltd.

25

Report of Independent Accountants

June 29, 2000
To the Board of Directors of Nippon Light Metal Company, Ltd.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, shareholders’ equity and of
cash flows, expressed in Japanese yen, present fairly, in all material respects, the financial position of Nippon Light Metal Company, Ltd. and its
consolidated subsidiaries at March 31, 1999 and 2000, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in Japan. These consolidated financial statements are the responsibility of the Company’s
management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of thesestatements in accordance with auditing standards generally accepted in Japan which require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used andsignificant estimates made by management, and evaluating the overall consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
As discussed in Note 1 (f) to the accompanying consolidated financial statements, effective April 1, 1999, the Company and some consolidated
subsidiaries changed their method of accounting for evaluation of marketable equity securities from the cost method to the lower of cost or market
value method.
As described in Note 1 to the accompanying consolidated financial statements, effective for the year ended March 31, 2000, the Company andits consolidated subsidiaries have adopted new Japanese accounting standards for preparation of consolidated financial statements, for researchand development costs and for income taxes.
In addition, as discussed in Note 13, on April 28, 2000, the Company and Shin Nikkei Company Limited (SNC), which is a 66.8% owned
consolidated subsidiary, entered into a contract whereby SNC would become a wholly-owned subsidiary of the Company effective August 1, 2000 by
utilizing the exchange procedure defined in Commercial Code.
The U.S. dollars amounts shown in the accompanying consolidated financial statements have been translated solely for convenience. We havereviewed this translation and, in our opinion, the consolidated financial statements expressed in Japanese yen have been translated into U.S.
dollars on the basis described in Note2 to the consolidated financial statements.

Notice to Readers
The accompanying consolidated financial statements are not intended to present the financial position and the results of operations and of cash flows in accordance with accounting
principles and practices generally accepted in countries and jurisdictions other than Japan. Accordingly the accompanying consolidated balance sheets and the related consolidated
statements of operations, shareholders’ equity and of cash flows and their utilization are not designed for those who are not informed about Japanese accounting principles, procedures andpractices.
The standards, procedures and practices utilized in Japan to audit such financial statements may differ from those generally accepted in countries and jurisdictions other than Japan.

26

Nippon Light Metal Company, Ltd.

Overseas Network
Overseas Office
China Regional OfficeHong Kong, SAR, China
Phone: 852-2522-3001

Overseas Subsidiaries
and Affiliates
North America
Alpac Aluminium Inc.
Quebec, Canada
Phone: 1-514-848-8000
Aluminum smelting(50%)
Nikkei North America
Aluminum Inc.
Ohio, U.S.A.
Phone: 1-216-463-5565
Trading and marketing(100%)
Alcan Nikkei Asia Holdings
LimitedBermudaPhone: 441-295-3550
Holding company for investment with
Alcan in Southeast Asia and China(40%)

East Asia
Alcan Nikkei Korea Limited
Seoul, Korea
Phone: 82-2-777-9195
Trading and marketing(51%) 1
Nonfemet International(China-Canada-Japan)
Aluminium Co., Ltd.
Shenzhen, China
Phone: 86-755-661-1569
Extrusion 2
Alcan Nikkei China Limited
Hong Kong, SAR, China
Phone: 852-2522-3001
Trading and marketing(51%)

Southeast Asia
Alcan Nikkei Asia Company
LimitedMalaysia
Phone: 60-3-754-5286
Management of invested companies inSoutheast Asia
(40%)
Alcan Nikkei Siam Limited
Bangkok, Thailand
Phone: 66-2-260-8000
Aluminum sheet, foil 3
Alcan Nikkei Thai Limited
Bangkok, Thailand
Phone: 66-2-250-7001
Extrusions, aluminum alloys 4
Aluminium Company of
Malaysia Bhd.
Malaysia
Phone: 60-3-756-1588
Aluminum sheet, foil, extrusions 5

Alcom Nikkei Specialty
Coatings Sdn. Bhd.
Malaysia
Phone: 60-3-342-2234
Pre-coated finstock 6
Amalgamated Aluminium
and Alloys Sdn. Bhd.
Malaysia
Phone: 60-3-341-9500
Aluminum alloys(35%)
Nikkei Singapore Aluminium
Pte. Ltd.
Singapore
Phone: 65-222-8991
Trading and marketing(100%)
Daiki Nikkei Thai Co., Ltd.
ThailandPhone: 66-3821-4631
Aluminum alloys(35%)
1Interest held through Nikkei Hong
Kong Aluminium Co., Ltd., which is
100% owned by Nippon Light Metal
Company, Ltd. (NLM)

2

45%; Interest held through Alcan
Nikkei Asia Holdings Limited (ANAH)

333%; Interest held through ANAH
37%; Interest held through Nikkei
Holdings Pte. Ltd., which is 100% owned
by ANAH

475%; Interest held through ANAH
2.6%; Interest held through Nikkei
Holdings Pte. Ltd., which is 100% owned
by ANAH

5

59.15%; Interest held through ANAH

650%; Interest held through ANAH
50%; Interest held through Aluminium
Company of Malaysia Bhd.

(As of June 29, 2000)

Nippon Light Metal Company, Ltd.

27

Directors and Officers

Directors

Officers

Yukoh Masuda

Kazuo Matsui

Eiji Matsui

Chairman of the Board
Representative Director

President
Chief Executive Officer

Toshikazu Fujita

Kazuo Matsui

Shigesato Sato

President
Representative Director

Excecutive Vice
President
Senior Executive Officer

Shigesato Sato
Kimihito Kakitani

Kimihito Kakitani

Hideo Endo
Yoji Miyauchi
Takashi Ishiyama
Koji Tajima

Senior Executive Officer

Motoi Kobayashi

Akihiko Hayashi

Yoshinobu Hiki

Akihiko Hayashi

Senior Executive Officer

Takamichi Sakai

Yoshisato Hiratsuka

Yoshisato Hiratsuka

Masato Hironaga

Hisao Kobayashi

Senior Executive Officer

Ariyoshi Okumura

Shigeru Kohmura

Akio Kainuma

Glenn R. Lucas

Executive Officer

Kazuyuki Hasegawa

Teruo Miyashita
Koji Kawakami
Tsuyoshi Nakajima

Executive Officer

Auditors

Takao Otsuji

Hiroshi Honma

Executive Officer

Hajime Hosokawa

Michio Hara

Yoshiyuki Wakahara

Executive Officer

Seiichi Takeda

28

Nippon Light Metal Company, Ltd.

(As of June 29, 2000)

Corporate Data

Head Office
NYK Tennoz Building
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
http://www.nikkeikin.co.jp
Phone: 03-5461-9281
Fax: 03-5461-9200
EstablishedMarch 30, 1939
Paid-In Capital¥37,458 million
Shares of Common Stock
Authorized: 1,600,000,000
Issued: 510,825,514
Number of Shareholders
33,821(As of March 31, 2000)
Stock Exchange Listings
Tokyo, Osaka and six other domestic
stock exchanges
Transfer Agent of Common Stock
Chuo Trust & Banking Co., Ltd.
Last Shareholders’ Meeting
June 29, 2000

Major Shareholders
Alcan Nikkei Asia Holdings Ltd.
(8.9%)
Dai-Ichi Kangyo Bank, Ltd.
(3.9%)
Asahi Mutual Life Insurance Co.
(3.9%)
Industrial Bank of Japan, Ltd.
(3.6%)The Sumitomo Trust & Banking
Co., Ltd.
(3.4%)
Chuo Trust & Banking Co., Ltd.
(3.0%)The Light Metal Educational
Foundation, Inc.
(2.9%)
Chuo Trust & Banking Co., Ltd.
(Trust Accounts)(2.2%)
Itochu Co., Ltd.
(2.2%)
Japan Securities Finance Co., Ltd.
(1.8%)

Riken Light Metal Industrial Co., Ltd.
Aluminum construction materials(100%)

Major Domestic AffiliatedCompanies
Shin Nikkei Co., Ltd.
Aluminum sashes, construction materials(66.8%)

Nikkei Extrusions Co., Ltd.
Aluminum extruded products(100%)

Nippon Electrode Co., Ltd.
Carbon for iron and steel blast furnaces
and for aluminum smelting, and othertypes of carbon(100%)
Nikkei Sangyo Co., Ltd.
Aluminum welding rods, various kinds ofcontract work
(100%)
Nikkei Information System Co., Ltd.
Computer operation under contract,
marketing office(100%)
Nikkei Logistics Co., Ltd.
Transport, warehousing 1
Nikkei Products Co., Ltd.
Sales of household utensils(100%)

1

Nippon Fruehauf Co., Ltd.
Aluminum vans, trucks, trailers, marine
containers(66%)

46%; Direct interest NLM
44%; Interest held through Shin
Nikkei Co., Ltd.
10%; Interest held through Nippon
Fruehauf Co., Ltd.

(As of June 29, 2000)

Nippon Light Metal Company, Ltd.

29

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

Printed in Japan